TOA CORPORATION

Business Details

This segment handles the development of infrastructure and social capital such as ports, railways, and roads, with a focus on marine civil engineering. Its main customers are government agencies, led by the Ministry of Land, Infrastructure, Transport and Tourism. The Civil Engineering Division and Civil Engineering Sales Division oversee operations, conducting domestic civil engineering works and design contracting, among others. The segment has a structure in which the competitive bidding ratio is high, making performance closely linked to trends in public investment. In FY2026 (ending March 2026), backlog projects progressed smoothly, centered on large-scale port works, resulting in an increase in both revenue and profit.

Recent Overview

Revenue and profit both increased due to steady progress on large-scale port works

Full-year segment revenue for FY2026 (ending March 2026) was ¥156,001 million (up 10.6% year on year), and segment profit was ¥13,717 million (up 4.0% year on year). Backlog projects, centered on large-scale port works, progressed smoothly, expanding revenue. Non-consolidated orders received trended favorably in both government and private sectors, reaching ¥161,850 million (up 14.1% year on year). Domestic private-sector orders increased significantly to ¥48,746 million (up 37.5% year on year). The backlog at period end stood at ¥197,463 million, securing an ample order backlog.

Key Products

Growth Drivers

• Steady progress in disaster prevention and mitigation measures and public investment based on the "First National Resilience Implementation Medium-Term Plan"
• Expanding demand for security-related infrastructure development amid strengthened defense capabilities (expanding defense and U.S. military-related business volume set as a key strategic priority)
• Maintaining and strengthening competitive advantage in the marine civil engineering field through strategic use of owned work vessels
• Steady trend in orders received from government agencies (non-consolidated domestic government orders received of ¥108,796 million in FY2026, ending March 2026, up 6.9% year on year)
• Significant expansion of domestic private-sector orders received (non-consolidated domestic private-sector orders received of ¥48,746 million in FY2026, ending March 2026, up 37.5% year on year)
• Continued occurrence of demand for maintenance and renewal of aging port infrastructure
• Challenging new areas addressing social issues such as carbon neutrality, CCS, and offshore wind power (Medium-Term Management Plan)

Risks

• Anticipated decrease in orders received in FY2027 (ending March 2027) due to the policy of prioritizing consumption of the ample backlog (non-consolidated orders received forecast at ¥292,000 million, down 13.8% year on year)
• Risk of rising construction costs due to soaring prices of materials and equipment and rising labor costs
• Risk of deteriorating order environment due to fluctuations in public investment budgets and policy changes
• Risk of deteriorating profitability due to the high ratio of competitive bidding
• Increase in depreciation expense due to shortened useful life associated with the relocation of the head office (planned for around summer 2027) (pushing down overall consolidated profit by ¥81 million in the current period)
• Risk of recording a provision for construction losses due to a serious accident in the demolition works related to the public conversion of Raw Material A/B Berths in the Ougishima leading area, which occurred on April 7, 2026 (possibility of estimate revisions in subsequent periods)