THE ZENITAKA CORPORATION

Business Details

A general construction business handling civil engineering, building construction, and other construction work overall. Serving both public-sector and private clients, the segment's strategic pillars are expanding orders based on domestic and overseas market analysis and building a production system that integrates sales, design, and construction. In FY2026 (ending March 2026), Building Construction increased 5.7% year on year while Civil Engineering decreased 0.3% year on year, resulting in overall completed construction revenue growth of 3.9% year on year. Non-consolidated subsidiaries complementarily handle rental of construction materials and equipment.

Recent Overview

Both completed construction revenue and profit increased, but orders received fell sharply by 36.2% year on year

In FY2026 (ending March 2026), completed construction revenue was ¥122,803 million (up 3.9% year on year) and segment profit was ¥4,199 million (up 25.6% year on year), achieving growth in both revenue and profit. The gross profit margin on completed construction also improved from 7.48% to 8.95%. On the other hand, orders received declined sharply, with Building Construction orders of ¥80,206 million (down 33.3% year on year) and Civil Engineering orders of ¥21,880 million (down 45.0% year on year) totaling ¥102,087 million (down 36.2% year on year), which could affect net sales levels in future periods. Major completed projects included the Kyocera Kagoshima Sendai Plant, Mitsui Fudosan Okazaki commercial facility, and the Kitasato University library.

Key Products

Growth Drivers

• Improved gross profit margin on completed construction: The gross profit margin on completed construction for FY2026 (ending March 2026) improved substantially to 8.95% (from 7.48% in the prior period), boosting profitability
• Steady growth in private-sector building construction: Private-sector completed construction revenue of ¥83,811 million (up 8.4% year on year) captured robust corporate capital investment
• Increase in civil engineering public-sector work: Civil Engineering public-sector completed construction revenue of ¥24,362 million (up 10.2% year on year), with public investment supporting sales
• Utilization of the order backlog: Carried-over construction work accumulated at the end of the prior period contributed to the increase in completed construction revenue for the current period
• Continued receipt of large-scale orders for energy, logistics, and manufacturing clients: Ongoing business relationships with major private clients such as Kyocera and Mitsui Fudosan

Risks

• Sharp decline in orders received: Orders received in FY2026 (ending March 2026) fell to ¥102,087 million (down 36.2% year on year), with sharp declines in both Building Construction and Civil Engineering, which could lower net sales levels in future periods
• Continued rise in materials and labor costs: Ongoing increases in energy and materials prices and a rising labor cost trend continue to pressure profitability
• Sharply worse forecast for FY2027 (ending March 2027): The forecast calls for net sales of ¥112,600 million (down 10.3% year on year) and operating income of ¥1,300 million (down 72.4% year on year), a substantial decline in both revenue and profit
• Sharp decline in public-sector orders: Civil Engineering public-sector orders received in FY2026 (ending March 2026) fell sharply to ¥14,007 million (down 55.3% year on year), widening the imbalance in order composition
• U.S. trade policy and geopolitical risk: Uncertainty in the global economy could lead to a review of private-sector capital investment plans in the domestic construction market
• Increase in selling, general and administrative expenses: The segment profit adjustment amount widened from -¥906 million in the prior period to -¥1,024 million, reflecting rising head-office administrative costs