FUKUDA CORPORATION

Business Details

Centered on the Company (order intake and execution of civil engineering and building construction work) and Fukuda Road Co., Ltd. (paving works), subsidiaries and affiliates engage in construction order intake and execution, as well as the leasing and manufacture/sale of construction-related equipment and materials. Composed of both private building construction (commercial facilities, logistics facilities, condominiums, etc.) and public civil engineering works (rivers, roads, water and sewage, etc.), this is the core business accounting for approximately 98% of the group's consolidated revenue. The Company is promoting improved profitability through securing appropriate contract prices and strengthening construction management systems.

Recent Overview

In Q1 FY2026 (ending December 2026), orders received expanded sharply, up 40.4% year on year, with profitability also improving.

In Q1 FY2026 (ending December 2026) (January–March 2026), consolidated orders received increased substantially to ¥42,587 million (up 40.4% year on year), and non-consolidated orders received rose to ¥19,594 million (up 51.6% year on year). Private-sector building construction orders were especially strong, with non-consolidated building construction orders up 77.7%. Segment profit increased 29.9% to ¥2,882 million (versus ¥2,218 million in the same quarter of the prior year), with profitability in the construction business rising compared to the prior period. Work in hand progressed smoothly with no schedule delays, and both revenue and profit exceeded the same quarter of the prior year. The full-year order forecast has been conservatively set at ¥172,500 million on a consolidated basis (a 10.7% decrease versus the prior year's actual results).

Key Products

Growth Drivers

• Strong order intake for private-sector building construction projects (non-consolidated building construction orders of ¥19,472 million, up 77.7% year on year)
• Improvement in gross profit margin on completed construction contracts driven by higher profitability in the construction business compared to the prior period
• Stabilized revenue recognition due to steady progress with no schedule delays in work in hand
• Resilient construction demand from both public and private sectors driven by energy-saving/decarbonization investment and disaster prevention/mitigation and infrastructure aging countermeasures
• Expanding demand for projects aimed at renewing and upgrading aging structures
• Productivity improvement and enhanced competitiveness through business transformation via DX promotion and AI utilization

Risks

• Cost pressure from persistently high increases in labor costs (wage hikes) and elevated material prices
• Constraints on construction capacity and impact on development projects due to declining numbers of skilled workers and severe labor shortages
• Risk of price inflation from rising crude oil and natural gas prices stemming from Middle East tensions, and risk of schedule delays due to difficulty in procuring materials
• Risk of slowdown in private-sector capital investment due to uncertainty over US trade policy and prolonged reorganization of international supply chains
• Risk that rising construction costs may exceed the pass-through of appropriate contract price adjustments
• Risk of downside to results from fluctuations in the order environment, given that the full-year order forecast is set at a 10.7% decrease (consolidated) versus the prior year's actual results