SUMIKEN MITSUI ROAD CO.,LTD.

Business Details

This segment undertakes paving work (asphalt and concrete), civil engineering work, and building construction work, among others. It handles government-ordered projects from the Ministry of Land, Infrastructure, Transport and Tourism and expressway operating companies, as well as land development and airport paving work for private developers such as Mitsui Fudosan Residential. In the fiscal year under review (FY2026, ending March 2026), completed construction revenue of ¥23,383 million accounted for approximately 80.2% of total company-wide net sales of ¥29,170 million, forming the core of Group earnings.

Recent Overview

Revenue declined, but profit rose substantially on higher orders and improved profitability

In FY2026 (ending March 2026), completed construction revenue decreased to ¥23,383 million (down 5.0% year on year), but segment profit rose substantially to ¥2,666 million (up 24.0% year on year). While paving work fell to ¥14,804 million (down 18.6% year on year), civil engineering work grew to ¥8,579 million (up 33.8% year on year), shifting the revenue composition. Orders received were strong at ¥25,388 million (up 10.2% year on year), and the carryover to the next fiscal year also increased to ¥11,285 million (up 21.3% year on year), raising expectations for a recovery in revenue in the following fiscal year.

Key Products

Growth Drivers

• Steady trend in public investment (large-scale projects ordered by the Ministry of Land, Infrastructure, Transport and Tourism and expressway companies)
• Higher value-added sales mix driven by increased orders for civil engineering work (orders received of ¥8,504 million in the fiscal year under review, up 21.8% year on year)
• Improved profitability through strengthened profitability-conscious construction management (segment profit margin of 11.4%, up from 8.7% in the prior fiscal year)
• Advance securing of next fiscal year's revenue through carryover to next fiscal year of ¥11,285 million (up 21.3% year on year)
• Focus on strengthening quality control and developing engineers under the Medium-Term Management Plan 2025-2027
• Stable sole-source order base including land development work for private developers

Risks

• Cost pressure from persistently high prices of construction materials, labor, and fuel
• Constraints on construction capacity due to chronic labor shortages and tight labor supply-demand conditions
• Fluctuation risk in construction volume, as evidenced by the substantial decline in paving work revenue (down 18.6% year on year)
• Declining profitability of fixed assets, as reflected in the impairment loss on fixed assets recorded (¥64 million in the fiscal year under review)
• Risk that completed construction revenue will fall short of plan due to delays in order timing
• Downward pressure on order unit prices from intensifying inter-company competition