SANTO CO.,LTD.
1788・Standard Market・Construction
Business
Santo Corporation is a mid-tier construction group founded in 1954 and headquartered in Ritto City, Shiga Prefecture (listed on the TSE Standard Market). The company operates through three segments: Civil Engineering (erosion/flood control, water supply and sewerage, roads, ground improvement, etc.), Construction (general building work including factories, stores, and welfare facilities), and Environmental Development (environment-related planning and real estate transactions). The group structure includes two subsidiaries (Kozawa Construction Co., Ltd. and Kusatsu Ritto Crematory Service Co., Ltd.) and one affiliate (Ambienta Co., Ltd.). Major customers include Shiga Prefecture (23.3% of sales in the 71st fiscal period) and other public-sector entities as well as private companies. The company holds proprietary construction methods (TRD Method and JST Method) to differentiate itself in the underground technology field.
Business Model
Revenue is mostly derived from completed construction revenue based on civil engineering and building construction contracts. The civil engineering business combines prime contracting and subcontracting for public agencies, while the building construction business is mainly prime contracting for private clients. A characteristic feature is the structure whereby orders received during the period accumulate as backlog carried forward to the next period, securing sales for the following period in advance. The environmental development business, through real estate sales and leasing, supplements profitability with a high operating margin of 49.3%. The company employs a financial management approach centered on internal funds, while flexibly utilizing short-term borrowings.
Company Strengths
The company owns proprietary TRD method (soil-cement continuous underground wall) and JST method (two-component instant-setting ground improvement) technologies in-house. Construction track records have been built up since 1997 and 1982, respectively, achieving technological differentiation from competitors. A specialized underground technology department has been established, and method research & development as well as equipment improvements continue to be carried out.
Backlog of construction orders carried forward to the next period at the end of the 71st fiscal year stood at ¥7,621 million (up 65.2% from ¥4,614 million at the end of the previous period). Both segments increased, with civil engineering at ¥2,889 million and construction at ¥4,732 million, securing the revenue base for FY ending June 2026 in advance. Orders received during the period also expanded significantly to ¥10,713 million from ¥6,554 million in the previous period.
The equity ratio at the end of the 71st fiscal year was 66.5%, with net assets of ¥3,429 million. Reliance on interest-bearing debt is low, and the company maintains a policy of repaying short-term borrowings by the end of the period. Against total assets of ¥5,086 million, total liabilities were ¥1,656 million, indicating high financial soundness and resilience against order fluctuation risk.
ENVALITH's Perspective
Performance Trend
Cumulative results for the first three quarters of FY2026 (ending June 2026) (July 2025–March 2026) showed net sales of ¥8,134 million (up 33.9% year on year), operating profit of ¥547 million (up 41.0%), ordinary profit of ¥553 million (up 41.1%), and quarterly net income attributable to owners of the parent of ¥356 million (up 42.6%), with sharp increases across all metrics. The construction (architecture) segment led the growth, with completed construction revenue up 74.3% and segment profit up 133.3%, while the civil engineering segment also performed solidly, with completed construction revenue up 9.5% and segment profit up 32.4%. As external tailwinds, floor space of new private non-residential building starts increased sharply for two consecutive months and new housing starts rose for three consecutive months, while the value of public works contracts declined for four consecutive months, acting as a headwind. Over the past five fiscal years, operating profit fell to ¥199 million in FY2024, before recovering to ¥327 million in FY2025 and reaching ¥547 million in the cumulative first three quarters of the current fiscal year, indicating a clear recovery and acceleration phase.
Growth Strategy
Aiming for sustained improvement in profit margins through strengthening orders for large-scale, high-value-added construction projects and promoting construction DX.
Promoting construction DX (digital transformation) and improving process management efficiency through the use of BIM/CIM to enhance on-site productivity. Aiming to maintain and improve profit margins amid rising construction costs. The civil engineering business achieved a profit margin of 10.1% in the cumulative nine months of FY2026 (ending June 2026), reflecting the effects of these initiatives in the results.
Continuing the policy of prioritizing orders for large-scale, high-margin construction projects in the building construction business. Backlog carried over to the next period reached ¥4,732 million (up 77.5% year on year), securing a revenue base for future periods. Actively capturing private-sector capital investment demand in categories such as factories and power plants.
Amid rising construction costs, actively pursuing negotiations to revise contract amounts in response to changes in construction content, aiming to pass on cost increases through pricing. The segment profit margin of the building construction business improved from 2.3% in the same quarter of the previous year to 3.1%, confirming the effectiveness of these efforts.
On May 13, 2026, the full-year consolidated earnings forecast was revised (net sales of ¥10,800 million, operating profit of ¥490 million). At the same time, the year-end dividend forecast was raised to ¥130 (ordinary dividend of ¥70 plus special dividend of ¥60). Cumulative results for the first three quarters have already exceeded the full-year forecast level, raising expectations for further expansion of shareholder returns.
Last updated: July 17, 2026