KITANO CONSTRUCTION CORP.
1866・Standard Market・Construction
Construction Business
The core segment of the Kitano Construction group, centered on building and civil engineering construction, with development and solar power generation businesses also operated.
| Period | Current | Previous | Change |
|---|---|---|---|
| Revenue (external customers) | ¥74,867 million | ¥77,040 million | ↓ |
| Segment profit | ¥4,127 million | ¥3,167 million | ↑ |
| Depreciation | ¥492 million | ¥507 million | ↓ |
| Orders received during the period (non-consolidated) | ¥51,617 million | ¥98,853 million | ↓ |
| Order backlog carried forward to next period (non-consolidated) | ¥69,992 million | ¥92,566 million | ↓ |
| Completed construction revenue (non-consolidated) | ¥74,190 million | ¥76,460 million | ↓ |
Business Details
In addition to the execution of building construction and civil engineering works, this segment operates ancillary development business (real estate leasing and sales) and a solar power generation business. Customers are predominantly private-sector companies (accounting for approximately 85% of completed construction revenue), with public-sector clients also accounting for a certain share. In the fiscal year under review (FY2026, April 2025 to March 2026), revenue to external customers was ¥74,867 million, accounting for approximately 95% of the group's total revenue of ¥78,791 million, making this the core segment.
Recent Overview
Although revenue declined, segment profit improved substantially, up 30.3% year-on-year, due to improved profitability.
In the fiscal year ended March 2026, revenue in the construction business segment declined to ¥74,867 million (down 2.8% year-on-year), while segment profit improved substantially to ¥4,127 million (up 30.3% year-on-year). The main factor was an improvement in gross profit margin on completed construction contracts. Meanwhile, orders received during the period (non-consolidated) declined substantially to ¥51,617 million (down 47.8% year-on-year), and the order backlog carried forward to the next period also declined to ¥69,992 million (down 24.4% year-on-year). During the fiscal year, the concentration of revenue on a specific customer (Kuraishi Regional Development Foundation, a public interest incorporated foundation) was resolved, and there is no longer any major customer accounting for more than 10% of revenue.
Key Products
Growth Drivers
- Improvement in gross profit margin on completed construction contracts due to a selective ordering policy emphasizing profitability (segment profit up 30.3% year-on-year)
- A stable order-taking environment supported by resilient trends in government and private-sector construction investment
- Securing capacity for future revenue recognition through an order backlog of ¥69,992 million (non-consolidated, as of end of March 2026)
- Efforts to improve productivity through DX promotion and operational efficiency
- Contribution to future earnings from the accumulation of development business expenditures (¥4,406 million)
Risks
- Downward pressure on medium-term revenue due to a substantial decline in orders received during the period (down 47.8% year-on-year to ¥51,617 million)
- Reduced capacity for future revenue recognition due to a decline in the order backlog carried forward to the next period (from ¥92,566 million to ¥69,992 million)
- Upward pressure on construction costs due to labor shortages and rising labor costs
- Risk of deteriorating profitability due to soaring raw material prices and exchange rate fluctuations
- Downward pressure on order unit prices due to intensifying competition for orders with other companies in the same industry (competitive bidding ratio for civil engineering works at 91.3%)
- Risk of client companies curbing capital expenditure due to rising energy prices
Last updated: June 26, 2026