TOKYU CONSTRUCTION CO., LTD.

Business Details

Composed of two segments: "Construction Business (Building)," which handles building construction and related businesses, and "Construction Business (Civil Engineering)," which handles civil engineering work and related businesses. The company focuses primarily on domestic private and public sector construction centered on the Tokyo metropolitan area, and continues to receive orders for Tokyu Group-related construction. Under the long-term management plan "To zero, from zero.," these are positioned as "core businesses," and the company is promoting stronger earning power by leveraging human capital and digital technology as sources of competitive advantage. Overseas operations are centered on civil engineering, but were significantly scaled back in the current period.

Recent Overview

Both building and civil engineering saw significant increases in domestic construction revenue; civil engineering profit margin improved sharply, with total Construction Business segment profit approximately 2.1x the prior period.

For the full year of FY2026 (ending March 2026), consolidated net sales completed for building construction were ¥259,236 million (up 18.0% year on year), and for civil engineering ¥74,350 million (up 8.6% year on year). Segment profit was ¥15,499 million for building (up 31.1% year on year) and ¥9,731 million for civil engineering (up 114.4% year on year), with civil engineering showing particularly significant improvement. Non-consolidated backlog remained at a high level of ¥618,119 million (up 19.2% year on year), providing strong visibility into future sales. On the other hand, overseas civil engineering orders and sales both declined sharply. Another notable feature was the sharp expansion of building orders from the Tokyu Group, which reached ¥82,310 million (up 280.6% year on year).

Key Products

Growth Drivers

• Continued robust construction investment driven by sustained domestic private capital expenditure appetite (private construction investment exceeding the prior year's level)
• Significant increase in Tokyu Group-related construction orders (¥82,310 million in Tokyu Group building orders in the current period, up 280.6% year on year)
• Maintenance of a high backlog level (¥618,119 million in total non-consolidated construction business, up 19.2% year on year), improving visibility of future sales
• Significant increase in domestic public sector and private orders for civil engineering work (domestic private civil engineering orders of ¥50,545 million, up 96.8% year on year)
• Significant improvement in civil engineering gross profit margin on completed construction (16.8%, up 5.4 points from 11.4% in the prior period), improving profitability
• Plan for ¥76,000 million in overseas civil engineering orders in the non-consolidated forecast for the next fiscal year (FY2027, ending March 2027), anticipating a full-scale return to overseas civil engineering

Risks

• Constraints on construction capacity due to a decline in skilled workers and the overtime work cap regulations
• Risk of rising construction costs due to persistently high raw material prices (material price surges due to Middle East conditions, etc.)
• Sharp decline in overseas construction work (non-consolidated overseas civil engineering sales of ¥2,565 million in the current period, down 62.9% year on year) and instability of overseas operations
• Uncertainty regarding the outlook for construction investment due to U.S. trade policy and instability in financial and capital markets
• Risk of defects in ongoing construction and construction flaws in properties delivered in prior years (provision for compensation on completed construction increased from ¥4,840 million in the prior period to ¥8,368 million)
• Challenges in maintaining profit levels amid a forecast decline in revenue, with consolidated net sales for the next fiscal year (FY2027, ending March 2026) projected at ¥334,000 million (down 2.1% year on year)