HAZAMA ANDO CORPORATION

Business Details

This segment covers civil engineering works undertaken directly by the reporting company (Ando Hazama) both domestically and overseas. Centered on public-sector clients, it receives orders for and constructs social infrastructure works such as tunnels, dams, roads, railways, and ports. In FY2026 (ending March 2026), non-consolidated orders received totaled ¥143,578 million (up 10.5% year on year), and the backlog of orders reached ¥273,971 million, providing an ample order base and a stable foundation for revenue recognition.

Recent Overview

Both sales and profit increased, with the gross profit margin on completed construction improving to 16.2%

In FY2026 (ending March 2026), Civil Engineering segment sales were ¥140,863 million (up 6.1% year on year), and segment profit was ¥15,484 million (up 2.0% year on year). On a non-consolidated basis, the gross profit margin on completed construction improved to 16.2%, up from 15.0% in the prior period. Orders received were strong at ¥143,578 million (up 10.5% year on year), driven by domestic public-sector orders of ¥97,065 million (up 19.1% year on year). On the other hand, overseas civil engineering orders shrank sharply to ¥4,054 million (down 53.0% year on year). The period-end backlog of orders was maintained at ¥273,971 million, up 0.9% year on year, keeping the foundation for future revenue recognition ample.

Key Products

Growth Drivers

• Stable demand for public-sector civil engineering works, supported by steady growth in government construction investment (domestic public-sector orders of ¥97,065 million in FY2026 ending March 2026, up 19.1% year on year)
• Visibility of future revenue recognition supported by a period-end backlog of orders of ¥273,971 million
• Improved profitability driven by an improved gross profit margin on completed construction (16.2% non-consolidated, versus 15.0% in the prior period)
• Diversification of the order mix through expansion of private-sector civil engineering orders (domestic private-sector orders of ¥42,458 million, up 6.6% year on year)
• Promotion of productivity improvement measures through construction automation and labor-saving initiatives utilizing ICT and AI
• Securing a stable volume of work through the receipt of large-scale, long-term projects such as the main construction (Phase 1) of the Yamadorisaka Dam

Risks

• Risk of fluctuation in public-sector orders: overseas civil engineering orders fell sharply by 53.0% year on year to ¥4,054 million, with the weakening of the overseas business base continuing
• Risk of increased total construction costs due to rising material prices and labor costs (a situation requiring continuous monitoring across the construction industry as a whole)
• Impact on construction capacity due to the decline and aging of skilled construction workers and the resulting labor shortage
• Risk of a weakening overseas business base due to the continued decline in overseas civil engineering completed construction revenue (¥4,586 million in FY2026 ending March 2026, versus ¥5,894 million and ¥7,346 million in the preceding two fiscal years)
• Risk of a slight decline in operating margin (from 11.4% to 11.0%): increases in selling, general and administrative expenses (up 18.0% year on year on a consolidated basis) pressuring profitability