Obayashi (1802) Q1 2027 earnings summary

Executive summary

• Consolidated net sales for FY2026 1Q rose 19.0% year-over-year to ¥623.4B, driven by strong domestic and overseas construction and real estate sales, including the consolidation of GCON, LLC.

• Operating profit more than doubled year-over-year to ¥32.7B, with ordinary profit up 98.2% to ¥36.4B, reflecting higher profitability in domestic building and real estate segments and the completion of loss-making projects.

• Profit attributable to owners of parent increased 116.3% year-over-year to ¥39.1B, aided by gains on the sale of cross-shareholdings.

• Orders received declined 7.2% year-over-year to ¥577.5B, mainly due to a high base in overseas building from the prior year.

• The acquisition of Multiplex, a leading Australian construction firm, was announced to expand presence in Australia, UK, and Canada.

Financial highlights

• Net sales increased by ¥99.6B year-over-year; operating profit up ¥16.9B (+107.0%); profit attributable to owners up ¥21.0B (+116.3%).

• Gross profit rose to ¥77.5B from ¥54.3B year-over-year, with gross profit on real estate and other up ¥7.5B and more than doubling in the real estate business.

• Basic EPS for the quarter was ¥56.87, up from ¥25.59 a year earlier.

• Cash and deposits increased by ¥26.6B from March 2026; cross-shareholdings reduced by ¥37.1B.

• Equity at June 30, 2026, stood at ¥1,244.4B; net assets at ¥1,299.7B.

Outlook and guidance

• FY2026 full-year forecasts remain unchanged: net sales ¥2,945.0B, operating profit ¥180.0B, profit attributable to owners ¥157.0B.

• Operating profit is forecast to decrease by ¥14.6B year-over-year due to fewer projects in final construction stages and limited profit improvement opportunities.

• New orders for FY2026 expected at ¥3,100.0B, up 3.0% year-over-year.

• ROE forecast at 12.3%, remaining above the 10% target.

• Annual dividend forecast is ¥94.00 per share, up from ¥88.00 in the previous year.