OKUMURA CORPORATION
1833・Prime Market・Construction
Business
Okumura Corporation is a general contractor founded in 1907, listed on the TSE Prime Market. It centers on civil engineering (approximately 37% of net sales) and building construction (approximately 59%), while also operating an investment and development business covering real estate and renewable energy, and other businesses including manufacturing and sale of construction machinery and materials. Major clients range widely, from government agencies and independent administrative institutions to private-sector operators of logistics facilities, medical facilities, and factories. The company is also expanding overseas, including shield tunneling work in Taiwan, and the group as a whole—comprising 9 subsidiaries and 6 affiliated companies—recorded consolidated net sales of ¥307,202 million in FY2026 (ending March 2026).
Business Model
Main revenue consists of completed construction revenue recognized under contracts for civil engineering and building construction work. Lead times from order receipt through construction to completion are long, and the backlog of construction orders carried forward to the next fiscal period (¥615,630 million as of the end of March 2026) serves as a leading indicator of future sales. Profit margins are managed through selective order intake prioritizing profitability, along with securing additional work and reducing costs. In the investment and development business, the company aims to build stable earnings independent of the construction business through real estate leasing and sales as well as electricity sales from renewable energy.
Company Strengths
As of the end of March 2026, the order backlog to be carried forward stood at ¥615,630 million (civil engineering ¥304,636 million, building construction ¥310,994 million), equivalent to approximately two years of annual completed construction revenue of ¥295,390 million. The company holds multiple long-term, large-scale projects, including the Murano Water Purification Plant renewal project (scheduled for completion in February 2033) and the cable tunnel construction project for Taiwan Power Company (scheduled for completion in March 2030), providing visibility into its medium-term revenue base.
The company leads in construction automation and remote-operation technology, having put into practical use remote operation of shield machines between Japan and Taiwan. It has secured multiple large-scale overseas projects, including the Baoshan shield tunneling project and the Gangfeng–Zhongke cable tunnel project in Taiwan, resulting in overseas sales in the civil engineering business of ¥11,318 million in FY2026 (ending March 2026), up 73.7% year on year. The company continues to invest ¥1,871 million in R&D expenses to maintain its technological competitiveness.
In the building construction business, the ratio of negotiated (sole-source) orders rose from 27.4% in the previous fiscal year to 50.9%, shifting toward an order structure that emphasizes profitability. Through securing additional work orders and promoting cost-reduction activities, the civil engineering business achieved an operating margin of 8.8% in FY2026 (ending March 2026), a substantial improvement from the previous fiscal year, while consolidated gross profit reached ¥38,669 million, up 22.0% year on year. In the first year of the medium-term management plan, both sales and profit at every stage reached record highs.
ENVALITH's Perspective
Performance Trend
Net sales expanded for five consecutive fiscal years, from ¥242,458 million in FY2022 (ended March 2022) to ¥307,202 million in FY2026 (ending March 2026), representing a CAGR of approximately 6.1%. Operating profit had fallen to ¥9,731 million in FY2025 (ended March 2025), but rebounded sharply in FY2026 (ending March 2026) to ¥15,928 million (up 63.7% year on year), aided by an improvement in the gross profit margin on completed construction contracts (mainly driven by improved profitability in Civil Engineering). Profit attributable to owners of parent surged to ¥18,360 million (up 574.3% year on year), but this figure includes a rebound from the prior period's impairment loss of ¥13,234 million and a one-off gain on foreign exchange forward contract valuation (¥7,392 million). As an external factor, a favorable market environment—supported by steady construction investment in both public and private sectors—has provided a tailwind. For FY2027 (ending March 2027), the company forecasts net sales of ¥304,000 million and operating profit of ¥20,500 million (up 28.7% year on year), but expects ordinary profit and net profit to decline as the one-off factors fall away.
Growth Strategy
A medium-term management plan built on three pillars: strengthening the profitability of the construction business, expanding business domains, and utilizing human resources.
The company aims to improve the gross profit margin on completed construction contracts through selective order-taking that takes into account construction capacity, as well as through securing additional work and promoting cost reduction activities. In FY2026 (ended March 2026), the operating profit margin of the civil engineering business recovered significantly to 8.8%, and the gross profit margin of the construction business as a whole also improved. For FY2027 (ending March 2027), the company targets operating profit of ¥20,500 million (up 28.7% year on year).
The company aims to achieve stable profitability in its renewable energy business through the resumption of commercial operations at Ishikari Bio Energy (April 2026). A decrease in depreciation expenses following the large-scale impairment loss recorded in the previous fiscal year also contributed to improved earnings, narrowing the operating loss of the investment development business to ¥730 million. The company expects the segment to turn profitable from the following fiscal year onward. Responding to the risk of breaching financial covenants on non-recourse borrowings remains an ongoing challenge.
As its shareholder return policy for the medium-term management plan period (FY2025–FY2027), the company has set a consolidated dividend payout ratio of 70% or higher (excluding one-off factors) and a DOE floor of 2.0%. In FY2026 (ended March 2026), the dividend per share was ¥297 (payout ratio of 70.2%), and the forecast for FY2027 (ending March 2027) is ¥300 (payout ratio of 70.4%), continuing dividends in line with this policy. The company also plans to flexibly conduct share buybacks.
Last updated: July 19, 2026