ENVALITH
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Fudo Tetra Corporation

1813・Prime Market・Construction

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株式会社不動テトラ logo
Fudo Tetra Corporation1813

Business

Fudo Tetra Corporation is a general construction group centered on three core businesses: civil engineering, ground improvement, and block business (consolidated: 8 subsidiaries and 1 affiliate). The company holds a broad range of construction domains related to national land development, from onshore and marine civil engineering works to liquefaction countermeasures, soft ground improvement, and steel formwork rental for wave-dissipating blocks. Its main customers are public institutions such as the Ministry of Land, Infrastructure, Transport and Tourism and expressway companies, and it is also expanding into private-sector clients such as data centers and energy-related facilities. The company is also promoting overseas expansion through its US subsidiaries Fudo Construction Inc. and Advanced Geosolutions Inc. (AGI).

Business Model

The company is fundamentally an order-based construction business, with civil engineering and ground improvement construction contracting serving as its core revenue source. In the ground improvement business, it secures highly profitable projects through the application of its proprietary construction methods (such as the Sand Compaction Pile method), while in the block business, rental income from steel formwork for wave-dissipating blocks forms stable, recurring revenue. Through collaboration with group companies (such as Aichi Base Kogyo), the company is also expanding into the building construction market, aiming to diversify its revenue sources.

Company Strengths

Through the expanded application of proprietary construction methods, including the Sand Compaction Pile method, the Ground Improvement segment achieved segment profit of ¥7,164 million (up 111.0% year on year) and net sales of ¥46,135 million in FY2026 (ending March 2026). The securities report explicitly states that construction work applying proprietary methods significantly boosted profitability.

As of the end of FY2026 (ending March 2026), consolidated order backlog to be carried forward stood at ¥73,065 million (Civil Engineering: ¥52,661 million; Ground Improvement: ¥20,007 million). In particular, the Civil Engineering segment achieved net sales of ¥33,739 million (up 18.9% year on year) for the period, supported by an opening backlog of ¥56,748 million, indicating high visibility of sales over the medium to long term.

The Comprehensive Technology Research Institute, an entity independent from the business divisions, is advancing R&D across 48 themes (21 commissioned, 27 proprietary), with R&D expenditure of ¥881 million for the period. The company filed 9 patent applications and achieved 2 NETIS registrations (a tetrapod gripping machine and CO2-absorbing concrete material), advancing the practical application of DX and carbon-neutral technologies.

ENVALITH's Perspective

In FY2026 (ending March 2026), the Ground Improvement segment profit of ¥7,164 million exceeded companywide operating profit of ¥5,919 million (before company-wide adjustments), reflecting a further increase in earnings dependence on this business. Meanwhile, the Civil Engineering business saw sales increase to ¥33,739 million (up 18.9% year on year), but segment profit fell sharply to ¥280 million (down 49.9% year on year). The forecast for the next fiscal year anticipates a recovery in Civil Engineering business profit to ¥510 million, but whether this profitability improvement can be realized will be a key variable for FY2027 (ending March 2027) performance.

The consolidated earnings forecast for FY2027 (ending March 2027) projects net sales of ¥81,000 million (down 0.9% year on year), operating profit of ¥4,800 million (down 18.9% year on year), and net income of ¥3,200 million (down 28.3% year on year), representing a significant decline in profit. The company explains this as part of a "fundamental strengthening of its management foundation," primarily due to expanded human capital investment such as more active hiring and improved compensation, with increases in selling, general and administrative expenses expected to weigh on profit. The order intake forecast for the Ground Improvement business is also expected to decline to ¥42,000 million (down 11.8% from the current fiscal year), reflecting a pullback after the recent surge.

Regarding the case of fictitious orders and other matters by employees discovered in the previous consolidated fiscal year, a special committee was established in August 2025 to conduct additional investigation, and the investigation report was received in November of the same year. The impact on the financial statements was judged to be minor, and no retroactive restatement was made; however, special investigation expenses of ¥354 million were recorded for the current period (compared with ¥111 million in the previous period). Confirming the effectiveness of preventive measures is expected to take time, and the state of internal controls and governance systems remains a risk factor requiring continued monitoring.

Growth Strategy

The medium-term management plan's 'harvest and realization' phase achieved improved profitability; the next fiscal year will focus on fundamentally strengthening the management foundation.

Against a backdrop of national resilience (kokudo kyoujinka) demand, the company is maximizing the profitability of construction works applying its proprietary construction methods while strengthening sales development in private-sector fields such as the building construction market, energy-related facilities, and data centers. In FY2026 (ending March 2026), orders received reached ¥47,600 million and segment profit reached ¥7,164 million; orders received for the next fiscal year are projected at ¥42,000 million, reflecting an expected pullback.

The company is promoting human capital management through active recruitment and improved working conditions, addressing structural issues such as labor shortages and tight labor supply. In FY2027 (ending March 2027), expanded human capital investment is expected to push up selling, general and administrative expenses, becoming a factor pressuring profits in the short term. Compatibility with health management (kenko keiei) initiatives is also stated as a policy.

The company is promoting DX (digital transformation) investment as a response to overtime work cap regulations and the declining working-age population, aiming to improve productivity and set appropriate construction periods and pass on costs through pricing. In the Block business, the medium-term management plan also sets out a policy of transitioning to new business models utilizing new technologies such as 3D printers.

Following fraudulent incidents such as fictitious orders, the company formulated and announced an additional detailed implementation plan for recurrence prevention measures in December 2025. It is promoting awareness reform among all officers and employees, corporate culture reform, strengthened internal controls, and thorough compliance. Special investigation costs of ¥354 million were recorded in the current period, and restoring public trust is a prerequisite for enhancing corporate value.

The medium-term management plan sets a profit distribution target of a payout ratio of approximately 40% (¥60 or more per share). In FY2026 (ending March 2026), reflecting an upward revision in results, the year-end dividend was set at ¥115 (an increase of ¥25 from the previous forecast of ¥90), achieving a payout ratio of 39.0%. For FY2027 (ending March 2027), an annual dividend of ¥115, including a ¥30 commemorative dividend (interim) marking the 20th anniversary of the merger, is planned, with the payout ratio projected at 54.4%.

Last updated: July 19, 2026