Toyo Construction (1890) Q2 2025 earnings summary

Executive summary

• Net sales for the six months ended September 30, 2024, decreased 17.1% year-over-year to ¥73,603 million, with operating profit down 33.8% to ¥2,772 million and profit attributable to shareholders down 15.3% to ¥1,846 million.

• Net sales for the second quarter reached ¥736 billion, representing 39% progress toward the full-year forecast, with a downward revision expected due to delays in domestic civil engineering and overseas projects impacted by order timing and typhoons.

• Orders received during the interim period exceeded initial full-year forecasts, especially in domestic architectural business, resulting in the highest carryforward in 10 years.

• Offshore wind power construction is positioned as a growth driver, with investments in new vessels and technology to support future projects.

• Dividend forecast remains unchanged at ¥80 per share for the year (¥30 interim, ¥50 term-end).

Financial highlights

• Domestic civil engineering net sales were ¥404 billion (40% of forecast), with gross profit at ¥53 billion; domestic architecture net sales were ¥250 billion (39% of forecast), with gross profit at ¥23 billion.

• Overseas sales reached ¥77 billion (31% of forecast), with gross profit at ¥11 billion; overseas business was affected by typhoon but showed recovery through design-change orders.

• Gross profit for the interim period was ¥9,015 million, down from ¥10,334 million year-over-year.

• Cash and cash equivalents at period end were ¥15,054 million, down from ¥32,690 million a year earlier.

• Equity ratio improved to 50.7% from 47.6% at the end of the previous fiscal year.

Outlook and guidance

• Full-year consolidated net sales forecast revised down to ¥182,000 million (down 2.6% year-over-year), with operating profit of ¥11,600 million (up 6.5%) and profit attributable to shareholders of ¥7,600 million (up 8.3%).

• Despite lower sales expectations, profit margins are expected to improve, maintaining previous profit forecasts.

• Gross profit in domestic civil engineering expected to increase from 3Q onward, driven by progress on previously ordered works and design-change orders for large projects.

• Domestic architecture order receipts expected to exceed initial forecasts, with ongoing works balance surpassing ¥100 billion at midterm.

• Orders for domestic architectural projects are expected to remain strong, with a full-year order forecast of ¥76 billion, up ¥10 billion from the initial forecast.