WAKACHIKU CONSTRUCTION CO.,LTD.

Business Details

A comprehensive construction segment centered on marine civil engineering, land civil engineering, and building construction in Japan. This core business accounts for approximately 98% of consolidated revenue. Major customers include public sector projects from the Ministry of Land, Infrastructure, Transport and Tourism, the Ministry of Defense, and other government agencies, as well as private-sector capital investment projects. The company is also expanding into renewable energy-related construction and maintenance/repair work. In FY2026 (ending March 2026), progress on large-scale construction projects remained at a high level, and productivity improvements in the building construction field also contributed, resulting in increased revenue and profit.

Recent Overview

High-level progress on large-scale construction projects and productivity improvements in building construction drove a 21.2% increase in revenue and an 18.3% increase in operating income.

Consolidated revenue in the construction business for FY2026 (ending March 2026) was ¥102,853 million (up 21.2% year on year), and operating income was ¥8,403 million (up 18.3% year on year). Large-scale orders were secured in both civil engineering and building construction, with progress remaining at a high level. Non-consolidated orders received amounted to ¥127,811 million (up 24.7% year on year), and order backlog reached ¥149,289 million (up 22.8% year on year), leading to a buildup in work on hand and increased revenue visibility for future periods. Productivity improvements in the building construction field contributed to an increase in gross profit on completed construction contracts, while SG&A expenses increased due to expanded DX and human capital investment.

Key Products

Growth Drivers

• High-level progress on large-scale construction projects (the main driver of the 21.2% year-on-year increase in construction segment revenue)
• Steady public investment supported by national resilience initiatives and social infrastructure development
• Improved segment profit margin driven by productivity gains in the building construction field
• High revenue visibility secured by a work-on-hand backlog of ¥149,289 million (up 22.8% year on year)
• 76.8% increase in order backlog driven by a surge in marine civil engineering orders (orders received of ¥40,102 million, up 40.6% year on year)
• Rapid expansion of orders received in the building construction field (orders received of ¥56,963 million, up 58.4% year on year)
• Business expansion into renewable energy-related construction (wind, biomass, solar)
• Promotion of larger-scale, higher-profitability projects under the medium-term management plan (FY2024\u2013FY2026)

Risks

• Risk of rising construction costs due to soaring prices of construction materials
• Labor shortages driven by a declining working-age population and working-hour regulations
• Risk of construction delays (affecting revenue recognition timing due to the percentage-of-completion method)
• Impact on construction profit/loss from fluctuations in estimated total construction costs
• Risk of unstable supply of construction materials due to global instability
• Impact on the supply chain from uncertainty stemming from US economic and trade policy
• Pressure on earnings from increased financial expenses such as syndicated loan fees (¥166 million in FY2026 (ending March 2026))
• Financial risk associated with an increase in interest-bearing debt (short-term borrowings of ¥16,120 million and long-term borrowings of ¥5,358 million)