Obayashi (1802) Q4 2025 earnings summary

Executive summary

• FY2024 consolidated net sales rose 12.7% year-over-year to ¥2,620.1B, driven by domestic construction and MWH consolidation in overseas civil engineering.

• Operating income surged 80.7% to ¥143.4B, with profit attributable to owners of parent up 94.6% to ¥146.0B, aided by high-margin projects and cross-shareholding sales.

• Orders received increased 33.6%–36.0% year-over-year to over ¥3,200B, reflecting strong demand and large project wins.

• FY2025/2026 forecasts anticipate a decrease in net sales to ¥2,560.0B and operating income to ¥122.0B, reflecting normalization after large project completions and fewer extraordinary gains.

Financial highlights

• Operating margin improved to 5.5% from 3.4% in FY2023; gross profit rose 35.6% to ¥297.8B.

• Cash and cash equivalents increased by over ¥53B year-over-year to ¥380.1B–¥380.2B.

• Interest-bearing debt and nonrecourse loans at ¥362.7B, up 12.0% year-over-year.

• FY2025/2026 forecasts: net sales down 2.3% YoY, operating income down 14.9% YoY, and profit attributable to owners of parent down 31.5% YoY.

• Net assets per share (BPS) reached ¥1,628.88; EPS doubled to ¥203.88.

Outlook and guidance

• FY2025/2026 expects lower earnings due to fewer large project completions, normalization of claim approvals, and a drop in North American building demand.

• Orders received are forecast to decrease 19.6% YoY to ¥2,700.0B, aligning with current construction capacity.

• ROIC expected at 5.5% and ROE at 8.6% for FY2025, still above medium-term targets.

• Annual dividend planned at ¥82 per share, maintaining a DOE of 5%.

• Continued focus on profitability, capital efficiency, and strategic shareholder returns, including share buybacks and stable dividends.