Takasago Thermal Engineering Co., Ltd.

Business Details

Centered on air conditioning system technology, the segment handles the design and construction of general facilities (offices, commercial facilities, etc.) and industrial facilities (semiconductor plants, manufacturing facilities, etc.), as well as maintenance and comprehensive facility management. In addition to domestic operations, the company operates globally through overseas subsidiaries in Southeast Asia (Thailand, Singapore, Malaysia, Vietnam), China, Hong Kong, Mexico, and other regions. As the core business accounting for approximately 98% of consolidated net sales, it has continued to expand earnings against a backdrop of solid private-sector capital investment demand.

Recent Overview

A misstatement in cash flow figures in the financial results summary was found and corrected

In the financial results summary for FY2026 (ending March 2026) announced on May 12, 2026, a misstatement was found in the figures in the consolidated statement of cash flows. This was discovered during the preparation of the securities report, and a correction was announced on June 12, 2026. The main corrections were a change in cash flow from operating activities from ¥29,284 million to ¥29,725 million, and a change in cash flow from investing activities from △¥11,400 million to △¥11,840 million. The primary causes were corrections to expenditures for the acquisition of subsidiary shares resulting in a change in the scope of consolidation (from △¥1,855 million to △¥2,295 million) and other items (from ¥1,868 million to ¥2,308 million). There was no change to cash flow from financing activities (△¥16,956 million) or to cash and cash equivalents at the end of the period (¥42,537 million).

Key Products

Growth Drivers

• Continued construction demand backed by solid capital investment demand in both manufacturing and non-manufacturing sectors
• Winning large-scale industrial facility construction projects for semiconductor plants (such as Rapidus) and data centers
• Improved profit margins through profitability improvement initiatives at both the order-taking and construction stages
• Expansion of overseas net sales (up 21.6% in the fiscal year under review), particularly growth in Southeast Asia and other regions
• High visibility of future sales backed by an order backlog of ¥308,674 million (as of the end of March 2025)
• Expanded business scope through the addition of new consolidated subsidiaries such as THS INNOVATIONS CO., LTD.

Risks

• Risk of rising construction costs and schedule delays due to shortages of materials and equipment, rising labor costs, and labor shortages
• Uncertainty over the global economic outlook due to overseas policy developments (such as U.S. tariffs)
• Risk of sales concentration in specific customers (such as Rapidus), accounting for 13.7% of completed construction revenue
• Change in future sales composition due to a decline in orders received for industrial facilities (down 21.8% year on year in the cumulative nine months of the fiscal year under review)
• Impact of exchange rate fluctuations on earnings from overseas operations
• Constraints on construction systems and personnel staffing due to responses to the "2024 Problem" (work style reform)