COMSYS Holdings Corporation

Business Details

Centered on Nippon COMSYS Corporation as the core operating company, this segment mainly conducts telecom facility construction business for the NTT Group. It is built on three pillars: Telecom Carrier Business (fiber-optic line activation construction, mobile communication quality improvement construction), IT Solutions Business (large-scale system infrastructure renewal, information terminal procurement and maintenance), and Social Systems Business (large-scale data center construction, undergrounding of power lines, renewable energy-related construction). Among COMSYS HD's eight segments, it is the core segment boasting the largest scale in both net sales and operating income.

Recent Overview

Increased revenue and profit driven by mobile communication quality improvement construction and large-scale data center construction

In FY2026 (ending March 2026), communication quality improvement construction (mobile) in the NTT facility business continued to perform favorably, leading to increased revenue. In the IT Solutions Business, large-scale system infrastructure renewal projects and information terminal procurement and maintenance projects progressed smoothly. In the Social Systems Business, large-scale data center construction, undergrounding of power lines, and renewable energy-related construction progressed steadily, leading to increased revenue. On the profit side, operational efficiency improved through DX utilization, boosting productivity, and the segment achieved net sales to external customers of ¥320,501 million (up approximately ¥10,363 million year on year) and segment profit of ¥26,064 million (up approximately ¥2,392 million year on year). In addition, the company established the "Nippon COMSYS Corporation Indonesia Branch" to accelerate business expansion in the Indonesian market.

Key Products

Growth Drivers

• Continued favorable performance of communication quality improvement construction (mobile) in the NTT facility business
• Increased construction volume due to the shift of facilities from metal to fiber-optic lines (10G-compatible)
• Expanding demand for large-scale data center construction, mainly in the Tokyo metropolitan area
• Capturing demand for large-scale system infrastructure renewal and AI-related investment in the IT Solutions Business
• Improved profit margins through operational efficiency and productivity gains via DX utilization
• Strengthened construction capabilities through inter-group collaboration (flexible response to large-scale data center and communication quality improvement construction)
• Acceleration of overseas market expansion through the establishment of the Indonesia branch
• Demand for social infrastructure such as renewable energy-related construction and undergrounding of power lines

Risks

• Risk of customer concentration in the NTT Group (Nippon Telegraph and Telephone East Corporation is a major customer accounting for a significant portion of consolidated net sales)
• Risk of order fluctuations due to changes in telecom carriers' capital expenditure policies
• Occurrence of impairment losses on fixed assets (¥64 million recorded in the Nippon COMSYS Group in the current period)
• Impact on construction execution capacity due to difficulty securing personnel and shortage of engineers
• Risk of rising construction costs due to soaring energy and raw material prices
• Risk of construction delays and profitability deterioration on large-scale projects

Business Details

A group centered on Sanwa COMSYS Engineering Corporation as the core operating company, mainly conducting telecom facility construction business for NCCs (New Common Carrier telecom carriers). In the current consolidated fiscal year, the segment experienced decreased revenue and profit due to the impact of telecom carriers' restrained capital expenditure. Although orders were secured for large-scale data center-related construction and other projects, the capital expenditure restraint of NCCs, the segment's main customers, affected both sales and profit. The segment continues to work on cost reductions and improved operational efficiency.

Recent Overview

Decreased revenue and profit due to telecom carriers' restrained capital expenditure, with profit margin declining significantly

In FY2026 (ending March 2026), although orders were secured for large-scale data center-related construction and other projects, revenue decreased due to the impact of restrained capital expenditure by telecom carriers (NCCs). On the profit side, the decrease in profit associated with the sales decline led to reduced profit, and the segment continues to work on cost reductions and improved operational efficiency. Net sales to external customers were only ¥32,755 million and segment profit only ¥869 million, and the fragility of the revenue base continued.

Key Products

Growth Drivers

• Diversification of sales through new orders for large-scale data center-related construction and other projects
• Efforts to improve profit margins through cost reductions and improved operational efficiency
• Continued benefit from ongoing telecom infrastructure demand across the COMSYS Group as a whole (such as mobile communication quality improvement construction)

Risks

• Risk of decreased orders and sales due to telecom carriers' (NCCs) restrained capital expenditure, which materialized again in the current period
• Risk that fixed cost burden pressures profit in the face of a substantial decline in sales (segment profit of ¥869 million, with a low profit margin of approximately 2.5%)
• Risk of business performance fluctuation due to high dependence on the communication investment trends of NCCs, the main customers
• Weakening of the revenue base following business consolidation into the Telecom Carrier Business

Business Details

Centered on TOSYS Corporation as the core operating company, this segment mainly conducts telecom facility construction business in the Koshinetsu area. It is built on three pillars: the Telecom Carrier Business (access facility construction for NTT, communication quality improvement construction, etc.), the IT Solutions Business (capturing cloud service demand, managed services), and the Social Systems Business (electrical facility construction, joint utility conduit PFI construction). The group also continuously works on standardization and improved operational efficiency through the use of an operational DX platform.

Recent Overview

Increased revenue and profit driven by communication quality improvement construction, PFI construction, and cloud demand capture

In FY2026 (ending March 2026), access facility construction and communication quality improvement construction (mobile) from telecom carriers, as well as electrical facility construction and joint utility conduit PFI construction in the Social Systems Business, progressed smoothly. In the IT Solutions Business, the capture of increasing cloud service demand also progressed smoothly, leading to increased revenue. On the profit side, in addition to the increase in sales, the segment worked on continuous operational efficiency improvements such as standardization through the use of the operational DX platform, achieving increased profit. Net sales to external customers were ¥38,467 million (up approximately 6.2% year on year), and segment profit was ¥3,129 million (up approximately 18.8% year on year).

Key Products

Growth Drivers

• Continued expansion of orders for access facility construction and communication quality improvement construction (mobile) from telecom carriers
• Capture of increasing cloud service demand and expansion of managed services in the IT Solutions Business
• Increased orders for infrastructure development projects such as electrical facility construction and joint utility conduit PFI construction in the Social Systems Business
• Improved productivity and profit margins through standardization and operational efficiency improvements via the use of the operational DX platform

Risks

• Risk of business performance being affected by telecom carriers' capital expenditure trends (the impact of restrained capital expenditure has already materialized at the Sanwa COMSYS Engineering Group and others, and a similar risk is latent here)
• Risk of regional concentration in the Koshinetsu area (demand fluctuations due to changes in the regional economy and demographics)
• Risk of constrained construction capacity due to difficulty securing personnel and shortage of engineers
• Risk of recording impairment losses on fixed assets (an impairment loss of ¥74 million was recorded in the previous period)
• Risk of sales fluctuation due to delays or cancellations of large-scale PFI projects and public works

Business Details

Centered on Tsuken Co., Ltd. as the core operating company, this segment mainly conducts telecom facility construction business in the Hokkaido area. While centered on construction for telecom carriers, the segment has also expanded its business domain into the IT Solutions Business and the Social Systems Business. In FY2026 (ending March 2026), the transfer of a consolidated subsidiary in the IT Solutions Business to the COMSYS Information Systems Group due to internal group reorganization affected business results. Net sales to external customers of ¥59,997 million represent the fourth largest scale among COMSYS Group's eight segments.

Recent Overview

Decreased revenue and profit due to the impact of IT subsidiary transfer from organizational reorganization, though communication quality improvement construction remained favorable

In FY2026 (ending March 2026), while orders for communication quality improvement construction (mobile) and large-scale data center-related construction from telecom carriers were favorable, net sales to external customers decreased to ¥59,997 million (down year on year) and segment profit decreased to ¥6,227 million (down year on year), mainly due to the transfer of a consolidated subsidiary in the IT Solutions Business to the COMSYS Information Systems Group as part of internal COMSYS Group reorganization. On the profit side, the decline in sales-linked profit had a significant impact.

Key Products

Growth Drivers

• Support to the Telecom Carrier Business from the continued favorable trend of communication quality improvement construction (mobile)
• Expansion of the Social Systems Business through the acquisition of orders for large-scale data center-related construction
• Expansion of business domain by applying existing technology to private-sector projects (electric power, railways)
• Strengthened construction capabilities and improved productivity through inter-group collaboration
• Entry into new markets such as defense- and local government-related communication construction in the Hokkaido area

Risks

• Risk of continued sales scale reduction due to internal group reorganization (transfer of the IT Solutions subsidiary)
• Downward pressure on the Telecom Carrier Business due to telecom carriers' restrained capital expenditure
• Risk of demand fluctuation due to geographic concentration in the Hokkaido area
• Risk of increased costs common to the construction industry, such as difficulty securing personnel and rising labor costs
• Risk that the sales-linked profit structure leads to a large decrease in profit during periods of declining revenue

Business Details

Centered on NDS Corporation as the core operating company, this segment mainly conducts telecom facility construction business in the Tokai area. It is built on three pillars: the Telecom Carrier Business (electromagnetic induction countermeasure construction, communication quality improvement construction), the IT Solutions Business (in-room information terminals and payment services for major hotel chains), and the Social Systems Business (power distribution facility construction, expressway-related construction, building electrical work), and promotes efficiency measures such as optimization of the construction system.

Recent Overview

Achieved increased revenue and profit driven by communication quality improvement construction and expansion of hotel-oriented IT business

In FY2026 (ending March 2026), revenue increased due to the promotion of electromagnetic induction countermeasure construction and communication quality improvement construction (mobile) from telecom carriers, the steady progress of power distribution facility construction, expressway-related construction, and building electrical work in the Social Systems Business, and the expansion of in-room information terminal and payment services business for major hotel chains in the IT Solutions Business. On the profit side, in addition to the increase in sales, profit increased due to the promotion of efficiency measures such as optimization of the construction system. Segment profit was ¥7,259 million, a significant improvement from ¥5,607 million in the prior period.

Key Products

Growth Drivers

• Continued expansion of orders for electromagnetic induction countermeasure construction and communication quality improvement construction (mobile) from telecom carriers
• Expansion of the in-room information terminal and payment services business for major hotel chains in the IT Solutions Business
• Steady trend of power distribution facility construction, expressway-related construction, and building electrical work in the Social Systems Business
• Improved profit margins through the promotion of efficiency measures such as optimization of the construction system
• Capture of data center-related demand and national resilience investment in the Tokai area

Risks

• Risk of decreased orders in the Telecom Carrier Business due to telecom carriers' restrained capital expenditure
• Regional risk due to geographic concentration in the Tokai area, including economic and natural disaster risks
• Risk of profit pressure due to difficulty securing personnel and rising labor costs
• Remaining unamortized goodwill balance of ¥95 million (amortization ongoing)

Business Details

Centered on SYSKEN Corporation as the core operating company, this segment mainly conducts telecom facility construction business in the Kyushu area. It handles three businesses: the Telecom Carrier Business (NTT business, mobile business), the IT Solutions Business, and the Social Systems Business. The segment worked to expand orders from telecom carriers, government agencies, private companies, and others, achieving increased profit through in-house construction initiatives and cost control.

Recent Overview

Achieved increased profit through in-house construction initiatives and cost management despite decreased revenue

In FY2026 (ending March 2026), while progress on access facility construction from telecom carriers and large-scale construction in the Social Systems Business was favorable, net sales to external customers decreased to ¥33,290 million year on year due to delays in large-scale projects in public works and other areas. On the other hand, as a result of in-house construction initiatives and cost control efforts, segment profit achieved a substantial increase to ¥2,078 million from ¥1,597 million in the prior period (up approximately 30%). The unamortized goodwill balance was minor at ¥0 million (current period amortization of ¥2 million).

Key Products

Growth Drivers

• Continued demand for NTT business and mobile communication quality improvement construction in the Telecom Carrier Business
• Improved profit margins through in-house construction initiatives and cost control
• Continued efforts to expand orders from telecom carriers, government agencies, private companies, and others
• Continued demand for 10G fiber-optic line activation construction and urban mobile communication quality support construction in the Kyushu area

Risks

• Risk that delays in large-scale projects in public works and other areas affect sales (this was a factor in the decreased revenue in the current period as well)
• Structure in which business performance is easily affected by telecom carriers' capital expenditure trends (the Telecom Carrier Business accounts for approximately 70% of sales)
• Regional risk due to geographic concentration in the Kyushu area, including regional economy and natural disaster risks
• Unamortized goodwill balance is ¥0 million (already resolved), but attention should be paid to new impairment risks associated with future M&A activities

Business Details

Centered on Hokuriku Denwa Koji Co., Ltd. as the core operating company, this segment mainly conducts telecom facility construction business in the Hokuriku area. It handles three businesses: the Telecom Carrier Business (Fiber, Power, Mobile Construction) for the NTT Group, the IT Solutions Business (system development between telecom carriers), and the Social Systems Business (Road-related Construction). The segment promotes integrated construction and maintenance operations and improved productivity through consolidation of operations.

Recent Overview

Fiber-optic line activation construction, mobile construction, and road-related construction progressed smoothly, achieving increased revenue and profit

In FY2026 (ending March 2026), orders for fiber-optic line activation construction, power construction, and communication quality improvement construction (mobile) from telecom carriers trended steadily. In the IT Solutions Business, development of systems between telecom carriers, and in the Social Systems Business, road-related construction progressed, leading to increased revenue. On the profit side, in addition to the increase in sales, the segment worked on improving operational efficiency through integrated construction and maintenance operations and improving productivity through consolidation of operations, achieving increased profit. Net sales to external customers were ¥19,059 million, and segment profit was ¥1,666 million.

Key Products

Growth Drivers

• Increased construction volume due to the shift of facilities from metal to fiber-optic lines for fiber-optic line activation construction from telecom carriers
• Continued expansion of orders for communication quality improvement construction (mobile)
• Expansion of system development between telecom carriers in the IT Solutions Business
• Expansion of orders for road-related construction and telecom facility construction in the Social Systems Business
• Effects of productivity improvement measures through integrated construction and maintenance operations and consolidation of operations

Risks

• Risk of fragility of business foundation due to geographic concentration in the Hokuriku area (natural disaster risk)
• Impact on the Telecom Carrier Business due to telecom carriers' restrained capital expenditure
• Impact on construction system due to difficulty securing personnel and labor shortage
• Risk of increased costs due to soaring raw material and subcontracting costs
• Risk of a reactionary decline following the temporary special demand from restoration and reconstruction construction related to the Noto Peninsula earthquake in the prior period

Business Details

Centered on COMSYS Information Systems Corporation as the core operating company, this segment mainly conducts software development and related businesses. Its main customers are telecom carriers, government agencies, and financial institutions, and it provides system development and construction, information and communications DX, and modernization of government systems. All sales are classified under the IT Solutions Business, making it the only IT-specialized segment among COMSYS Group's eight segments that does not have a Telecom Carrier Business or Social Systems Business. Business scale has expanded due to the transfer of a consolidated subsidiary through internal COMSYS Group reorganization.

Recent Overview

Achieved substantial increase in revenue and profit driven by subsidiary transfer through organizational reorganization and progress on large-scale projects

In FY2026 (ending March 2026), business scale expanded as a consolidated subsidiary in the IT Solutions Business was transferred from the Tsuken Group as part of internal COMSYS Group reorganization, resulting in net sales to external customers of ¥30,211 million. System development and construction for telecom carriers, government agencies, and financial institutions trended steadily, and information and communications DX and modernization of large-scale government systems steadily expanded. Through thorough cost management of projects, segment profit achieved an increase to ¥3,209 million.

Key Products

Growth Drivers

• Expansion of orders for system development and construction from telecom carriers, government agencies, financial institutions, and others
• Continued expansion of demand for information and communications DX and government system modernization
• Expansion of business scale through internal COMSYS Group reorganization (transfer of subsidiary from the Tsuken Group)
• Continued AI-related investment by large enterprises and expanding demand for managed services in cloud environments due to utilization and deepening of generative AI
• Maintaining and improving profitability through thorough project cost management
• Expansion of orders backed by growth of the domestic IT service market at government agencies and local governments

Risks

• Risk of sales being affected by telecom carriers' capital expenditure trends
• Risk of recording provisions for losses on construction contracts in software development projects (deterioration of project profitability)
• Impact on order-taking capacity and productivity due to difficulty securing and developing IT personnel
• Sustainability of organic growth after the completion of internal group reorganization
• Constraints on capacity to respond to large-scale investment projects relative to segment asset scale (¥19,919 million)

Business Details

The "Others" segment consists of a group of subsidiaries engaged in the Staffing Business, Shared Services Business, and other businesses, and COMSYS Holdings Corporation (a pure holding company), which is not attributable to any business segment. The holding company received management fees of ¥1,726 million and dividends of ¥13,900 million from the core operating companies, recording standalone operating revenue of ¥15,626 million and operating income of ¥13,876 million. Of the segment's total sales of ¥20,527 million, sales to external customers amounted to only ¥1,809 million, with the majority consisting of internal group transactions (¥18,717 million).

Recent Overview

Holding company revenue increased, expanding segment profit to ¥14,092 million

In FY2026 (ending March 2026), the holding company received management fees of ¥1,726 million (¥1,570 million in the prior period) and dividends of ¥13,900 million (¥13,000 million in the prior period) from the core operating companies, recording standalone operating revenue of ¥15,626 million (up 7.2% year on year) and operating income of ¥13,876 million (up 6.4% year on year). Segment-wide sales also increased to ¥20,527 million (up 6.5% year on year), with segment profit increasing to ¥14,092 million (up 6.7% year on year), representing increased revenue and profit. This was mainly due to the increase in intra-group transaction sales to ¥18,717 million, against a backdrop of overall group business expansion.

Key Products

Growth Drivers

• Stable securing of management fee income (¥1,726 million) and dividend income (¥13,900 million) by the holding company from the core operating companies
• Increased demand for shared services and staffing associated with overall group business expansion
• Improved efficiency of intra-group fund management through the utilization of a cash management system (CMS)

Risks

• The majority of segment sales (approximately 91%) consists of intra-group transactions, with sales to external customers limited to ¥1,809 million, making revenue highly dependent on the business performance trends of group companies
• Since revenue as a pure holding company is affected by the dividend policy and management fee levels of the core operating companies, it is susceptible to being affected in the event of overall group performance deterioration
• The increase in tangible and intangible fixed assets is extremely small at ¥44 million, indicating a fragile independent business foundation