TAKUMA CO., LTD.

Business Details

Centered on the construction (EPC business) and operation (O&M business) of municipal solid waste treatment plants, industrial waste treatment plants, sewage treatment plants, sludge incineration plants, and biomass power plants. Main customers are local governments and private operators. After-sales services (maintenance, operation management, new power retail business, etc.) spanning the 20-30 year life cycle after plant commissioning form a stock-type revenue base, and the company is deploying a DBO (design-build-operate) model combining the EPC business with operations.

Recent Overview

Orders received and order backlog reached record highs. Both revenue and operating profit increased substantially.

In FY2026 (ending March 2026), orders received increased by ¥73,916 million year-on-year to ¥288,709 million, significantly exceeding the initial target of ¥250,000 million and marking a record high. The order backlog also reached a record ¥722,939 million. Revenue increased by ¥13,284 million year-on-year to ¥126,935 million, driven by progress on ordered plants, and operating profit increased by ¥2,543 million to ¥15,624 million. This segment accounts for approximately 80% of both consolidated revenue and consolidated operating profit.

Key Products

Growth Drivers

• Continued robust demand for renewal and core improvement works for aging waste treatment plants (municipal infrastructure renewal cycle)
• Large-scale DBO business (integrated construction and operation) orders progressing at a pace significantly exceeding plan (FY2026 (ending March 2026) orders received of ¥288,709 million, exceeding the target of ¥250,000 million)
• Expanding demand for new construction of biomass power plants and sewage sludge incineration power plants
• Expansion of stock-type revenue from after-sales services (maintenance, O&M, new power retail) as delivered plants increase
• Expansion of the operations business through increased comprehensive outsourcing of waste treatment plant operations and the shift toward comprehensive outsourcing in sewage operations
• Improved quality and enhanced profitability of the operations business through data utilization

Risks

• The EPC business is susceptible to national policy, public investment trends, and subsidy policy, creating risk of significant demand fluctuation over the medium to long term
• Constraints on construction resources due to labor and workforce shortages (explicitly identified as an issue in the 14th Medium-Term Management Plan)
• Risk of recording provisions for construction contract losses (disclosed as a key accounting estimate item)
• Risk of medium- to long-term contraction in order volume due to fiscal strain on local governments amid population decline and aging
• Risk that construction capacity and personnel constraints become a limiting factor for revenue realization amid the order backlog accumulating to a high level of ¥745,158 million (consolidated total)