KAWADA TECHNOLOGIES,INC

Business Details

Centered on Kawada Industries, Inc. and Fujimae Steel Industries, Inc., this segment handles the design, fabrication, and erection/installation of steel bridges and building steel frames. Customers include public sector clients such as the Ministry of Land, Infrastructure, Transport and Tourism and expressway companies (Steel Bridge Business) and private developers/general contractors involved in large-scale redevelopment projects in the greater Tokyo and Kansai areas (Steel Frame Business). Revenue for FY2026 (ending March 2026) was ¥49,879 million, accounting for approximately 42% of the group total. Revenue declined significantly due to weak orders for new bridge construction and few projects contributing to progress-based revenue during the period, but operating profit posted a slight increase year on year thanks to design change gains and other factors.

Recent Overview

Revenue declined sharply by 21.0%, but design change gains secured a slight increase in operating profit

In FY2026 (ending March 2026), revenue declined significantly to ¥49,879 million (down 21.0% year on year) due to continued weak orders for new bridge construction and a large number of long-construction-period projects that had not yet reached full-scale progress. Meanwhile, large-scale renewal construction ordered by expressway companies and multiple design change gains offset the impact of the revenue decline, allowing operating profit to secure a slight increase to ¥6,320 million (up 0.7% year on year). Order backlog carried forward to the next period grew to ¥104,794 million (up 9.9% year on year), expanding the capacity for future revenue recognition.

Key Products

Growth Drivers

• Order backlog carried forward to the next period has accumulated to a record-high level of ¥104,794 million (up 9.9% from the end of the prior period), providing significant capacity for future revenue recognition
• Accumulation of orders for large-scale renewal and new construction projects ordered by expressway companies and the Ministry of Land, Infrastructure, Transport and Tourism
• Profit-boosting effect from design change gains on large-scale construction projects (both Steel Bridge and Steel Frame businesses)
• Continued solid demand for private-sector steel frame demand from large-scale redevelopment projects in the greater Tokyo area
• Expansion of the renewal and maintenance construction market driven by the imperative to address aging infrastructure
• Planned orders for large-scale projects in the Steel Bridge Business

Risks

• Continued weak order volume for new steel bridge construction, making it a challenge to maintain factory utilization rates
• Risk that the large number of long-construction-period projects that have not yet reached full-scale progress will result in limited contribution to current-period progress
• Risk of construction schedule delays and reduced progress due to rising construction costs and labor shortages
• Uncertainty over order timing due to postponement or reconsideration of large-scale redevelopment projects in the Steel Frame Business
• Chronic labor shortages, including at partner companies, straining construction resources
• Intensifying order competition (bidding competition for WTO projects and large-scale expressway company projects, and general contractors entering the renewal construction market)