TOMOE CORPORATION
1921・Standard Market・Construction
Business
Tomoe Corporation is a long-established steel structure construction company founded in 1917 (Taisho 6), with its founding business centered on the design, fabrication, and construction of three-dimensional structures, bridges, steel frames, and steel towers. The group currently consists of the Company, five consolidated subsidiaries, and one affiliated company, and operates two business segments: Steel Structure Construction and Real Estate Business. In the Steel Structure Construction segment, the company provides high-value-added construction work for government and private-sector clients, while the Real Estate Business stabilizes group earnings through leasing, management, and sales. Listed on the Standard Market of the Tokyo Stock Exchange. Net sales were ¥34,951 million (FY2026, ending March 2026).
Business Model
In the Steel Structure Construction business, the company handles everything from order intake to design, fabrication, and construction in an integrated manner, recognizing sales based on percentage-of-completion revenue recognition. The order backlog (¥30,113 million) underpins sales for the next fiscal period. In the Real Estate Business, stable cash flow from leasing income is combined with real estate sales revenue (¥3,132 million in the current period) to complement the volatility risk of the construction business. The company maintains a funding structure that combines internal funds with borrowings from financial institutions.
Company Strengths
Since its founding in 1917, the company has handled highly demanding construction work such as three-dimensional structures, bridges, steel towers, and anechoic chambers, building customer trust as a company known for its engineering, or "Tomoe of Technology." It positions technology development as a key pillar of corporate strategy, including proprietary products such as seismic dampers and buckling-restrained braces, as well as the introduction of integrated CAD/CAM systems and AR inspection technology, and holds technical assets that competitors find difficult to replicate in the short term.
The consolidated order backlog as of the end of March 2026 stood at ¥30,113 million (up 4% year on year). Orders carried over to the next fiscal period include large-scale projects such as the Otemachi Tokiwabashi redevelopment, TDK's new campus, a Defense Bureau warehouse, and the Utsunomiya bridge construction, with the construction schedule secured through projects scheduled for completion in February 2030 (Reiwa 12). This buildup in the order backlog structurally supports revenue from the next fiscal period onward.
Segment assets for the Real Estate Business reached ¥40,112 million, with operating profit for the period at ¥2,854 million (more than double the ¥1,225 million recorded in the previous period). Combining Real Estate Sales revenue of ¥3,132 million (versus zero in the previous period) with rental income of ¥2,407 million, the segment functions as a stable revenue source that complements fluctuations in construction progress within the construction business. Assets from Tomoe Giken, Izumi Kosan, and Reiwa Kensetsu, which became consolidated subsidiaries in 2024 (Reiwa 6), are also beginning to contribute meaningfully to earnings.
ENVALITH's Perspective
Performance Trend
Net sales for FY2026 (ending March 2026) remained flat at ¥34,952 million (up 0.8% year on year). By segment, Steel Structure Construction declined to ¥27,939 million (down 11% year on year), while the Real Estate Business expanded sharply to ¥7,013 million (up 115% year on year), underpinning overall performance. Operating profit improved to ¥4,759 million (up 21.0% year on year), but the Steel Structure Construction segment deteriorated to ¥1,905 million (down 30% year on year), with the Real Estate Business (¥2,855 million) driving the improvement. Profit attributable to owners of parent fell sharply to ¥6,227 million (down 58.1% year on year), reflecting the absence of one-off gains recorded in the prior period—gain on step acquisitions of ¥6,447 million and gain on negative goodwill of ¥5,247 million—while in the current period, gain on sale of investment securities of ¥3,151 million was the main component of extraordinary income. As an external factor, elevated material prices and labor shortages are squeezing profitability in the Steel Structure Construction business. For FY2027 (ending March 2027), the company forecasts a significant decline in earnings, with net sales of ¥32,000 million (down 8.4% year on year) and operating profit of ¥2,800 million (down 41.2% year on year), raising concerns that performance may be entering a plateau.
Growth Strategy
Under the third medium-term management plan "TOMOE BUILD up 5," the company is promoting the utilization of Group strengths, strengthening of its business foundation, and expansion into adjacent business areas.
The company built up an order backlog of ¥30,113 million (up 4% year on year), securing visibility for next-period sales, while aiming to improve profit margins through enhanced talent acquisition and production efficiency gains. However, the operating profit forecast for FY2027 (ending March 2027) of ¥2,800 million represents a significant expected decline in profit, leaving the realization of margin improvement as a remaining challenge.
Through the two pillars of Real Estate Sales revenue (¥3,390 million) and leasing income (¥3,623 million), Real Estate Business net sales for FY2026 (ending March 2026) expanded sharply to ¥7,013 million with segment profit of ¥2,855 million. Progress is being made in establishing a stable earnings base through the utilization of Group-held real estate assets.
In FY2026 (ending March 2026), the company acquired ¥6,699 million and cancelled ¥10,779 million of treasury shares, reducing the number of shares outstanding by approximately 17%. The year-end dividend was increased to ¥36 (¥24 ordinary plus ¥12 special), improving the payout ratio to 21.2% and net assets per share to ¥2,160.48. However, the dividend is planned to decrease to ¥24 in FY2027 (ending March 2027).
Through the additional acquisition of subsidiary shares (¥4,460 million expenditure) that did not change the scope of consolidation, the company deepened management integration within the Group. Non-controlling interests decreased significantly from ¥10,590 million to ¥1,670 million, enhancing the effectiveness of unified Group management. Expansion into adjacent business areas through the business development division is also continuing.
Last updated: July 19, 2026