Oriental Shiraishi Corporation

Business Details

This segment covers the construction, manufacture, and sale of prestressed concrete (PC) civil engineering structures, construction work using the pneumatic caisson method, repair and reinforcement work on bridges and other structures, design and construction of PC building structures, and design and manufacture of construction equipment. Main customers are public entities such as Central Nippon Expressway, West Nippon Expressway, and the Ministry of Land, Infrastructure, Transport and Tourism. The segment is centered on Oriental Shiraishi Corporation, with Taiko Giken Co., Ltd., Sakae Kaihatsu Co., Ltd., and Denka Rinotech Co., Ltd. as constituent companies (Kikumasa Co., Ltd. and Kikumasa Koumuten were absorbed into Taiko Giken effective January 1, 2026).

Recent Overview

Net sales increased 5.3% year on year, but operating income decreased 5.7% due to increased SG&A expenses, etc. Orders received expanded significantly by 38.2%.

Net sales for the period were ¥56,828 million (up 5.3% year on year), an increase, due partly to the contribution of a newly consolidated subsidiary (Denka Rinotech), although this was offset by a decline mainly in new bridge construction work. Segment profit decreased to ¥4,725 million (down 5.7% year on year). Orders received increased significantly to ¥76,325 million (up 38.2% year on year), and the order backlog grew to ¥106,082 million (up 22.5% year on year). Separately, defective products not meeting required quality standards were discovered in the portion manufactured by a consolidated subsidiary for the Hanshin Namba Line Yodogawa Bridge reconstruction work, necessitating remanufacturing and re-erection of the bridge, resulting in the recognition of an extraordinary loss (compensation payment of ¥774 million).

Key Products

Growth Drivers

• Cumulative public works contract value for the fiscal year trending steadily at 110.8% year on year, with a favorable order environment including the effect of supplementary budgets
• Robust orders for pneumatic caisson work such as large pump stations mainly in the greater Tokyo area
• Continued growth in demand for repair and reinforcement work driven by expanding needs for aging infrastructure countermeasures and disaster prevention/mitigation
• Expansion of technical and business scope in concrete repair and reinforcement through the consolidation of Denka Rinotech Co., Ltd. as a subsidiary (April 1, 2025, acquisition cost ¥331 million, voting rights ratio 51%)
• Strengthened caisson construction and maintenance capabilities through the absorption of Kikumasa and Kikumasa Koumuten by Taiko Giken (effective January 1, 2026)
• Order backlog built up to ¥106,082 million (up 22.5% year on year), providing significant capacity for future sales recognition
• Under the new medium-term management plan 2026-2028, targets of ¥800 million in net sales and ¥68 million in operating income for the final year (FY2029, ending March 2029), with planned investment of approximately ¥200 million over three years

Risks

• Risk of delayed progress on large-scale PC civil engineering (new bridge) and pneumatic caisson projects (Osaka Monorail, Hokkaido Shinkansen, etc.)
• Risk related to the certain completion of bridge remanufacturing and re-erection for the Hanshin Namba Line Yodogawa Bridge reconstruction work, and risk related to the group's quality control system and recovery of social trust
• Risk of profit margin decline due to increased goodwill amortization (¥313 million during the period) and increased SG&A expenses
• Risk of cost ratio deterioration due to construction period extensions and rising labor costs, including for subcontractors, associated with work-style reform
• Risk of impact on supply chains and energy prices due to soaring prices of steel and other construction materials and U.S. trade policy
• Increase in carried-over projects and deterioration in personnel allocation balance due to sharp cuts in public investment or larger order lot sizes
• Risk of loss recognition due to estimation errors in total construction costs (progress recognition under the input method)