Takamatsu Construction Group (1762) Q2 2025 earnings summary

Executive summary

• Orders received for 2Q FY ending March 2025 rose 17.8% year-over-year to ¥192.7 billion, with net sales up 13.1% to ¥162.1 billion, but operating profit fell 22.5% to ¥2.5 billion due to losses at Asunaro Aoki Construction, weak performance at Toko Geotech, and rising costs.

• Ordinary profit dropped 37.6% to ¥2,141 million, and profit attributable to owners of parent declined 54% year-over-year to ¥0.5 billion.

• Orders exceeded plan, net sales were in line, but operating profit missed targets, prompting a downward revision of full-year operating profit guidance.

Financial highlights

• Gross profit for 2Q was ¥19.1 billion, nearly flat year-over-year, with gross margin declining 1.6 points to 11.8%.

• Selling, general and administrative expenses increased to ¥16,511 million.

• Extraordinary losses included ¥508 million in office relocation expenses.

• Net assets decreased by ¥490 million to ¥133,578 million, with an equity-to-asset ratio of 52.5%.

• Total assets increased by ¥9,342 million to ¥254,491 million, mainly due to higher receivables and real estate business costs.

Outlook and guidance

• Full-year orders received forecast revised up by ¥10 billion to ¥400 billion; net sales guidance unchanged at ¥350 billion.

• Full-year operating profit forecast cut by ¥2 billion to ¥13 billion due to ongoing cost pressures and project profitability issues.

• Profit attributable to owners of parent expected to decline 23.6% to ¥7,000 million; basic earnings per share forecast at ¥201.04.

• Annual dividend maintained at ¥82 per share, with a payout ratio of 40.8%.