TAKADAKIKO(Steel Construction)CO.,LTD.

Business Details

Centered on New Steel Bridge Design, Fabrication & On-site Installation, this segment also handles Existing Bridge Maintenance & Repair Works, design, fabrication and construction of Bridge-related Steel Structures & Composite Structures, and fabrication of Civil Engineering & Marine-related Steel Structures. It is the core business, accounting for 74.2% of consolidated net sales. Major customers are public entities such as the regional bureaus of the Ministry of Land, Infrastructure, Transport and Tourism and expressway companies, giving the segment's performance a structure that is heavily influenced by trends in public investment.

Recent Overview

Net sales declined 18.5% year on year to ¥10,618 million, and the segment posted a loss of ¥451 million

Due to the impact of new steel bridge order volumes declining significantly for three consecutive fiscal years since FY2024 (ending March 2024), the segment was unable to secure sufficient work volume, resulting in net sales falling to ¥10,618 million (down 18.5% year on year) and a segment loss of ¥451 million (compared to a segment profit of ¥119 million in the prior period). On the other hand, orders received slightly exceeded the prior period at ¥11,137 million (up 1.1% year on year), and the order backlog also increased to ¥14,304 million (up 3.8% year on year), securing a minimum order base for a recovery in performance from the next fiscal year onward. Major orders received included Osaka Prefecture's Osaka Monorail Aramoto-kita, the Kinki Regional Development Bureau's Shichikenba elevated bridge, Dabutsugawa Bridge, and the widening of the Setagawa Ohashi pedestrian bridge, and the Kyushu Regional Development Bureau's Kuma Ohashi.

Key Products

Growth Drivers

• Expansion of the maintenance business (management resources concentrated on this growth field through organizational restructuring into the Maintenance Division, with a target of securing a combined order backlog of ¥5 billion or more for the maintenance business and the Seiken Truss business by the end of March 2027)
• Expansion of orders for the Seiken Truss business (centered on fabrication by partner companies, offering high capital efficiency and contributing to ROE improvement, with the order backlog at the end of March 2026 at ¥940 million, an increase from the prior period)
• Recovery of bridge factory utilization rates from the next fiscal year onward as progress is made on large-scale orders (Osaka Monorail Aramoto-kita, Kuma Ohashi, Shichikenba elevated bridge, etc.)
• Improved fixed cost efficiency through a review of the production system at the Wakayama plant and reallocation of personnel
• Advancement of management sophistication and operational efficiency through the use of DX and AI (set as a priority issue for FY2027, ending March 2027)
• Improvement of business processes through the core system renewal project (business investment of ¥520 million implemented in FY2026, ending March 2026)

Risks

• Risk that new steel bridge order volumes, having declined significantly for three consecutive fiscal years since FY2024 (ending March 2024), will keep the order backlog at the end of FY2026 (ending March 2026) below ¥20 billion, delaying the recovery of factory utilization rates
• Structural deterioration of profit margins due to intensifying order competition, forcing the acceptance of orders with poor profitability (segment loss margin of -4.2% for the current period)
• Risk that continued increases in raw material and energy costs due to yen depreciation will continue to pressure gross profit margin on completed construction
• Risk of order suspensions or delays by clients due to instability in the international situation and persistently high construction costs
• Uncertainty regarding progress in consuming the order backlog and securing new orders toward achieving the FY2027 (ending March 2027) performance forecast (net sales of ¥14,500 million, operating profit of ¥220 million)