ENVALITH
五洋建設株式会社 logo

PENTA-OCEAN CONSTRUCTION CO.,LTD.

1893・Prime Market・Construction

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五洋建設株式会社 logo
PENTA-OCEAN CONSTRUCTION CO.,LTD.1893

Business

Toyo Construction is a general contractor founded in 1896, with three core businesses: domestic civil engineering, domestic building construction, and overseas construction. Domestically, the company undertakes civil engineering works for social infrastructure such as ports, roads, and tunnels, as well as building construction projects including distribution warehouses, data centers, and hospitals. Overseas, with Singapore, Hong Kong, and Southeast Asia as its main markets, it handles large-scale infrastructure projects such as airports, land reclamation, and ports. Major clients include government agencies such as the Ministry of Land, Infrastructure, Transport and Tourism and the Ministry of Defense, as well as major private companies in the logistics, real estate, and energy sectors. Consolidated net sales for FY2026 (ending March 2026) reached ¥794,306 million, and the order backlog (carried-forward construction volume on a non-consolidated basis) reached ¥1,228,764 million, securing a revenue base spanning multiple years.

Business Model

The main revenue source is net sales of completed construction contracts, with revenue recognized over a certain period according to the percentage of construction completion. There are many large-scale projects that take multiple years from order receipt to completion, forming a structure in which the backlog carried over to the end of the fiscal period underpins sales in subsequent periods. The unconsolidated backlog of construction in progress at the end of FY2026 (ending March 2026) remained at a high level of ¥1,228,764 million, providing high visibility of revenue. As complementary revenue sources, the company also operates real estate leasing, shipbuilding, and environment-related businesses.

Company Strengths

As of March 31, 2026, non-consolidated backlog of construction contracts stood at ¥1,228,764 million (domestic civil engineering ¥327,855 million, domestic building construction ¥508,924 million, overseas ¥391,983 million). Compared to the previous period, domestic building construction increased 13.5% and overseas increased 15.1%, with accumulation accelerating, securing a multi-year revenue base.

The company owns proprietary construction vessels for offshore wind power work, including the SEP-type multi-purpose crane vessels "CP-16001," "CP-8001," and "Sea Challenger." It has accumulated proprietary technologies such as BIM/CIM and AI-based construction management systems (i-PentaCOL/3D, PiCOMS), sulfate-resistant concrete "MIC Guard 100," and smart joint technology for long precast piers, giving it a technological foundation that is difficult for competitors to replicate in the short term.

For FY2026 (ending March 2026), the top customers by revenue were the Ministry of Land, Infrastructure, Transport and Tourism at ¥119,389 million (15.0% of revenue), the Government of Singapore at ¥90,168 million (11.4%), and the Ministry of Defense at ¥84,667 million (10.7%). Long-standing business relationships and trust with government agencies underpin the stability of orders, and domestic civil engineering orders received in FY2026 (ending March 2026) expanded sharply to ¥340,623 million (up 37.9% year on year).

ENVALITH's Perspective

Consolidated net sales for FY2026 (ending March 2026) reached ¥794,306 million (up 9.2% year on year), operating profit was ¥55,304 million (up 154.9%), and profit attributable to owners of parent was ¥34,692 million (up 178.4%), all record highs. This substantially exceeded the final-year targets of the medium-term management plan (FY2023–FY2025), which had fallen short of plan for two consecutive years prior. The main drivers were steady progress on the domestic civil engineering and building construction order backlog and improved construction profitability, with ROE improving significantly to 18.7%. Steady expansion in domestic construction investment provided an external tailwind, while the company's own efforts to strengthen profitability management also contributed to the sharp profit recovery.

The overseas construction business posted a segment loss of ¥3,235 million in FY2026 (ending March 2026), a substantial improvement from the loss of ¥15,602 million in the prior period, but it did not turn profitable. This was affected by a profitability review on one building construction project and additional loss recognition at an equipment subsidiary. On the other hand, large new orders such as the Changi Airport Terminal 5 connecting tunnel works, Tuas North reclamation works, and Hong Kong International Airport works have built up the individual overseas order backlog to ¥391,983 million (up 15.1% year on year), suggesting sales expansion can be expected from the next fiscal period onward. However, improving the precision of profitability management on overseas projects remains an essential challenge for sustained improvement in consolidated profit.

Consolidated capital expenditure for FY2026 (ending March 2026) surged to ¥95,942 million from ¥38,151 million in the prior period, and interest-bearing debt expanded to ¥196,100 million (up ¥29,700 million year on year). The equity ratio has been on a declining trend, at 25.1% (versus 26.1% in the prior period). The new medium-term management plan (FY2026–FY2028) targets consolidated net sales of ¥880,000 million, operating profit of ¥63,500 million, and ROE of 16.7% for FY2028, but ongoing capital expenditure such as the construction of work vessels for offshore wind power will weigh on the balance sheet. Meanwhile, the forecast for FY2027 (ending March 2027) anticipates securing operating cash flow of ¥56,000 million and reducing interest-bearing debt (to ¥185,000 million), making it a key point of focus whether the transition from the investment phase to the recovery phase proceeds as planned.

Growth Strategy

Aiming for sustainable growth through steady progress on its abundant backlog and expansion into new markets such as offshore wind and overseas business

Against a backdrop of robust domestic construction demand driven by national resilience initiatives, defense capability reinforcement, data centers, and logistics facilities, the company aims to steadily progress its non-consolidated backlog of ¥836,780 million (domestic) and achieve continuous improvement in gross profit margin. The non-consolidated domestic order intake target for FY2027 (ending March 2027) is ¥630,000 million.

Through investment in the construction of large foundation installation vessels and other equipment (a major component of the ¥95,942 million capital expenditure in FY2026, ending March 2026), the company is building construction capacity for offshore wind projects. Leveraging the completed construction of the Kitakyushu Hibikinada Offshore Wind Farm as a foothold, it aims to expand order intake in the domestic offshore wind market. In FY2027 (ending March 2027), investment is planned to be curtailed to ¥44.9 billion (consolidated) as the company shifts into a returns phase.

Large new orders including the Changi Airport Terminal 5 connecting tunnel works, the Tuas North reclamation works, and Hong Kong International Airport works have built up an overseas backlog of ¥391,983 million. Through strengthened loss management at equipment subsidiaries and a review of profitability in building construction works, the company aims to turn its overseas building construction business profitable in FY2027 (ending March 2027), targeting a gross profit margin of 1.1%.

Under the new medium-term management plan starting in FY2026, the company targets consolidated net sales of ¥880,000 million, operating profit of ¥63,500 million, ROE of 16.7%, a dividend payout ratio of 40% or more, and a total shareholder return ratio of 60% or more by FY2028. Through the promotion of DX and GX and the practice of sustainability management, the company aims to become a

Last updated: July 19, 2026