Kawagishi Bridge Works Co.,Ltd.

Business Details

The company's core businesses are the design, fabrication, and on-site construction of steel frames and other steel structures, and it also engages in the manufacturing, sale, and installation of Precast Concrete products. Its major customers are leading general contractors such as Kajima Corporation, Shimizu Corporation, Taisei Corporation, and Toda Corporation. The company has won orders mainly for large-scale redevelopment projects in the Tokyo metropolitan area, with its subsidiary Kawagishi Planning Co., Ltd. handling design and cost estimation services. The company is a single-segment enterprise that does not operate businesses outside of construction.

Recent Overview

Sales increased but profit declined sharply due to lower factory utilization; full-year forecast left unchanged

In the interim period of FY2026 (ending September 2026) (October 2025 to March 2026), completed construction revenue rose to ¥12,799 million (up 8.8% year on year) due to the recognition of completion on large-scale projects. On the other hand, affected by a decline in factory processing utilization rates, operating profit fell sharply to ¥487 million (down 49.1% year on year), ordinary profit to ¥584 million (down 46.4%), and interim net income to ¥401 million (down 44.3%). Non-operating expenses newly included litigation-related costs of ¥28,000 thousand. Orders received declined slightly to ¥13,069 million (down 0.8% year on year). The order backlog increased from the end of the previous fiscal year to ¥32,742 million, maintaining visibility of future sales. The full-year earnings forecast (sales of ¥22,000 million, operating profit of ¥1,000 million) remains unchanged from the figures announced on November 14, 2025. The annual dividend forecast is ¥140 (ordinary dividend of ¥90 plus a commemorative dividend of ¥50).

Key Products

Growth Drivers

• Visibility of future sales supported by a high order backlog of ¥32,742 million (end of interim period)
• Steel frame demand in certain regions driven by large-scale projects in the Tokyo metropolitan area and major investments such as semiconductor plants
• Expansion of the medium-term sales base driven by an increase in steel frame orders received (¥12,630 million in the current interim period, up 10.9% year on year)
• Progress in passing on rising costs of raw materials and other inputs through pricing
• Strengthening of the financial base through the expansion of unrealized gains on investment securities (¥2,735 million at period-end, up ¥800 million from the previous fiscal year-end)

Risks

• Industry-wide steel frame demand is projected at approximately 3.5 million tons in FY2025, falling below 4 million tons for the third consecutive year, raising concerns of prolonged demand weakness
• Deterioration of profit margins due to lower factory processing utilization rates (operating margin of 3.8% in the current interim period, a sharp decline from 8.1% in the same period of the previous year)
• Risk of surging prices for imported raw materials and other inputs due to prolonged turmoil in the Middle East
• Order hesitancy, construction schedule revisions, and delayed project starts due to budget shortfalls stemming from persistently high material prices, logistics costs, and labor costs
• Growing uncertainty due to deteriorating Japan-China relations, including rare earth export restrictions, a decline in the number of visitors to Japan, and labor shortages
• Incurrence of litigation-related expenses (¥28,000 thousand in the current interim period) and the risk of additional costs going forward
• Risk of revenue concentration among major customers (leading general contractors)
• Although the interim progress rate stands at a high 58.2% against the full-year sales forecast of ¥22,000 million, recovery in factory utilization in the second half is key to achieving the profit forecast