TODA CORPORATION
1860・Prime Market・Construction
Business
Toda Corporation is a general contractor listed on the Tokyo Stock Exchange Prime Market, founded in 1881. Its core businesses are domestic and international building and civil engineering contracting, and it operates across six segments: Domestic Investment and Development (proprietary real estate development and leasing), Domestic Group Companies (construction subsidiaries such as Sato Kogyo and Showa Construction, building management, and hotels), Overseas Group Companies (construction and real estate in Thailand, Vietnam, Indonesia, the United States, and elsewhere), and Environment and Energy (floating offshore wind, onshore wind, and solar power generation). The company has 53 consolidated subsidiaries and 29 affiliated companies, with consolidated net sales of ¥645,737 million for FY2026 (ending March 2026). While capturing robust construction demand from data centers, logistics facilities, redevelopment projects, and infrastructure renewal, the company is cultivating its renewable energy business as a strategic growth area.
Business Model
The main revenue source is contracted construction and civil engineering work. By leveraging the time lag between order receipt and recognition of completed construction revenue, the carried-forward construction backlog for the next fiscal period (¥1,073,376 million as of end-March 2026) secures visibility of future sales. In addition, in domestic investment and development, the company enhances asset efficiency through a circular real estate investment model utilizing private placement REITs, while in the environment and energy segment it accumulates electricity sales revenue from floating offshore wind and onshore wind power. The structure aims for higher profitability by creating synergies through "horizontal expansion" collaboration between the construction business and strategic businesses.
Company Strengths
The carried-forward order backlog (non-consolidated) at the end of March 2026 stood at ¥1,073,376 million (up 8.3% year on year). It remained at a high level, with Domestic Building Construction at ¥716,343 million and Domestic Civil Engineering at ¥353,465 million, including major projects such as the Toranomon 1-chome East Redevelopment and the Yokohama-Shonan Road tunnel. This order backlog provides a high degree of confidence in supporting revenue for future periods, underpinning the stability and predictability of business performance.
Operating profit in the Building Construction segment reached ¥26,972 million in FY2026 (ending March 2026) (up 62.8% year on year), with the profit margin improving from 4.6% to 7.4%. This was driven by cost reductions at the design and construction preparation stages through front-loading, selective order-taking that emphasizes appropriate construction periods and appropriate profit margins, and optimization of personnel allocation and production processes. The non-consolidated gross profit margin for Building Construction also improved significantly, from 10.7% to 13.7%.
Following repeated demonstrations off the coast of Goto City since 2013, the company began commercial operation of Japan's first floating offshore wind farm (2,100kW x 8 units) in January 2026. Utilizing a Ministry of the Environment commissioned project and the NEDO Green Innovation Fund, the company has built an integrated technology development framework encompassing design, construction, and O&M. Its knowledge, certifications, and construction track record as a first mover form a unique competitive advantage that is difficult for competitors to replicate in a short period of time.
ENVALITH's Perspective
Performance Trend
Revenue bottomed out at ¥547,155 million in FY2023 (ended March 2023) and has grown for three consecutive fiscal years, reaching a five-year high of ¥645,737 million in FY2026 (ending March 2026), up 10.1% year on year. Operating profit surged 43.5% year on year to ¥38,215 million, and net income attributable to owners of the parent jumped 46.8% year on year to ¥36,981 million. The primary drivers were improved profitability in the construction business (gross profit margin on completed construction contracts of 13.7%) and gains on real estate sales at overseas group companies. As an external factor, robust private-sector construction demand (data centers, logistics facilities, etc.) supported a more profitable construction mix. Operating cash flow expanded sharply to ¥62,460 million (from ¥26,413 million in the prior period), strengthening the financial base. The equity ratio improved to 39.1% (from 37.1% in the prior period). For FY2027 (ending March 2027), revenue is forecast to grow to ¥753,000 million, but ordinary profit and net income are expected to decline.
Growth Strategy
Through higher profitability in construction and expansion of strategic businesses, the company sets medium- to long-term targets of ROE of 10% or more and ROIC of 5% or more
Through front-loading, the company has thoroughly eliminated waste and reduced costs at the design and construction preparation stages, improving the gross profit margin on completed construction contracts (architecture) to 13.7% (FY2026 non-consolidated). Backed by an order backlog of ¥1,073,376 million to be carried into the next fiscal year, the company aims for FY2027 non-consolidated architecture segment sales of ¥433,800 million and a profit margin of 11.3%.
Positioned as a priority-managed business under the Medium-Term Management Plan 2027, the company is advancing smart city development through collaboration (horizontal expansion) between its construction business and strategic businesses. It aims for a recovery in the Domestic Investment and Development segment's forecasted sales for the next fiscal year to ¥40,000 million (up 27.9% year on year).
With the offshore wind farm off Goto City and the onshore wind farm in Brazil now operational, Environment and Energy segment sales expanded sharply to ¥3,327 million (up 261.5% year on year). Toda Solar Sharing LLC was also newly established. The company forecasts continued rapid growth with next fiscal year sales of ¥7,000 million (up 110.4% year on year), although operating losses are expected to continue.
Gains on the sale of real estate by a US subsidiary and the consolidation of Aqua Nishihara Corporation Ltd. as a subsidiary drove a sharp increase in Overseas Group Companies segment profit, up 449.0% year on year to ¥5,623 million. The company aims for next fiscal year sales of ¥73,000 million (up 7.8% year on year), strengthening its business foundation in Southeast Asia and the United States.
Under a policy targeting DOE of 3.5% or more and a total payout ratio of approximately 70%, the company achieved an annual dividend of ¥58 for FY2026 (ending March 2026) (up ¥28 year on year) and a dividend payout ratio of 47.0%. Share buybacks (¥7,001 million during the fiscal year) were also conducted. The company is strengthening its investment process with medium- to long-term targets of ROIC of 5% or more and ROE of 10% or more. The dividend forecast for the next fiscal year is ¥60.
Last updated: July 19, 2026