BESTERRA CO.,LTD

Business Details

Engages in demolition and maintenance work for all types of plants—including steel mills, power plants, and oil refining facilities—as well as general buildings. Provides comprehensive engineering services including construction method proposals, design, construction management, safety management, and regulatory response, operating under a fabless model in which actual construction is outsourced to specialized subcontractors. Major customers are large enterprises in the steel, electric power, and petrochemical industries. Net sales of completed construction contracts for the first quarter of FY2027 (ending January 2027) were ¥3,235 million (up 33.0% year on year), and segment profit (on a gross profit basis) was ¥705 million (up 49.0% year on year).

Recent Overview

Steady progress on large-scale construction projects and strengthened selective order-taking drove Q1 net sales of completed construction contracts up 33% year on year

In the first quarter of FY2027 (ending January 2027), construction on large-scale projects that had been progressing since the previous fiscal year proceeded ahead of plan, and reinforcement of the construction management structure through the hiring of construction supervisors was effective, resulting in net sales of completed construction contracts of ¥3,235 million (up 33.0% year on year). Through the promotion of selective order-taking with an emphasis on profitability, along with improved estimation accuracy and appropriate cost management, the gross profit margin on completed construction contracts improved to 21.8% (versus 19.5% in the same period of the prior year). Orders received for construction contracts surged to ¥3,865 million (up 188.5% year on year), and the backlog of construction contracts carried forward to the next fiscal year renewed its all-time high at ¥9,141 million (up 49.8% year on year). Separately, an accident occurred at a facility demolition construction site in Kawasaki City on April 7, 2026, and the impact on financial position and operating results is currently unknown.

Key Products

Growth Drivers

• Further acceleration of demand for renewal of energy and power facilities driven by the GX2040 Vision's target of approximately 60-70% non-fossil power sources (renewable energy plus nuclear power)
• Continued expansion of demolition and renewal demand due to the aging and economic obsolescence of plants built during the period of high economic growth
• Increase in consolidation and reorganization of plant facilities toward realizing a decarbonized society, and an increase in separately ordered projects
• Strengthening of the construction management structure and expansion of order-taking capacity through active hiring of construction supervisor personnel
• Improved profitability through the promotion of selective order-taking with an emphasis on profitability, along with improved estimation accuracy and better cost management
• High visibility of next fiscal year's performance owing to the backlog of construction contracts carried forward to the next fiscal year of ¥9,141 million, an all-time high level
• Expansion of business locations into plant-concentrated regions and exploration of overseas markets based on the "Leading the Future Medium-Term Management Plan 2030"

Risks

• Risk of cost pressure due to rising labor costs and surging fuel and material prices
• Constraints on the construction management structure and intensifying competition for hiring due to a chronic shortage of construction industry personnel
• Risk of period-to-period performance volatility due to delays in the progress of large-scale projects or fluctuations in construction periods
• Risk to financial position and operating results arising from an accident at a construction site in Kawasaki City on April 7, 2026 (a facility fell during dismantling of an unloader crane), the impact of which is currently unknown
• Risk of sales concentration among major customers
• Risk of changes to customers' capital expenditure plans due to U.S. protectionist trade policy, the Chinese economy, and instability in the energy situation
• Risk of increased working capital needs associated with the scaling up of construction projects (as a subsequent event, the company resolved to borrow a total of ¥6,000 million)