RAITO KOGYO CO., LTD.

Business Details

Operates Slope Protection Works, Foundation & Ground Improvement Works, Repair & Reinforcement Works, Environmental Remediation Works, general civil engineering works, Building Construction Works, and other operations. Domestically, the segment serves both government and private-sector clients, while overseas operations, conducted through a US subsidiary, handle ground improvement works and related services. Benefiting from policy tailwinds such as disaster prevention and mitigation, national resilience initiatives, and infrastructure aging countermeasures, this is the core segment accounting for 99.9% of consolidated Group net sales.

Recent Overview

Orders, net sales, and profit margin all improved in tandem, achieving record-high performance

In FY2026 (ending March 2026), construction of backlog projects at the Company and its US subsidiary progressed smoothly, resulting in construction segment net sales of ¥139,027 million (up 14.8% year on year). Combined with improved construction profitability, segment profit rose to ¥17,153 million (up 34.1% year on year), with the profit margin improving to 12.3%. Orders received also remained favorable at ¥143,760 million (up 9.0% year on year), and the backlog carried forward to the next fiscal year remained at a high level of ¥91,929 million. Net sales in North America expanded substantially to ¥11,358 million (from ¥7,613 million in the prior fiscal year). An impairment loss of ¥541 million was recorded in the Construction Business segment.

Key Products

Growth Drivers

• Continued high level of government construction investment centered on disaster prevention and mitigation and national resilience initiatives (budget execution based on the "First National Resilience Implementation Medium-Term Plan")
• Increased orders for repair and reinforcement works driven by growing demand for infrastructure aging countermeasures (including bridge repair works commissioned by expressway companies)
• Expansion of overseas ground improvement works performance, centered on the US subsidiary (North America net sales of ¥11,358 million, up 49.2% year on year)
• Stable revenue recognition base supported by an ample backlog (backlog carried forward to next fiscal year of ¥91,929 million)
• Improved construction profit margin through continued selective order-taking with an emphasis on profitability (gross profit margin improved to 21.8%)
• Continued resilience in private-sector non-residential construction investment, supported by steady demand for labor-saving and digital-related investment amid labor shortages

Risks

• Risk of rising cost ratios due to continued surges in materials and labor costs (subcontracting expenses account for 46.3% of cost of completed construction)
• Risk of contraction in the domestic construction market due to mid- to long-term fiscal constraints and population decline
• Impact on overseas operations (North America) from a global economic slowdown triggered by shifts in US tariff policy
• Risk of lost order opportunities due to difficulty securing engineers and construction personnel (labor shortages)
• Risk of construction delays on large-scale projects and recording of provisions for construction contract losses (provision balance of ¥203 million in the fiscal year under review)
• Risk of recording impairment losses in the Construction Business segment (¥541 million recorded in the fiscal year under review)