OKUMURA ENGINEERING Corp.

Business Details

The company manufactures and sells fluid control equipment, centered on Butterfly Valves, for a wide range of industries including construction, power generation, shipbuilding, and various plants. Its products are adopted by major customers both domestically and internationally, and the business is organized into two market segments: land-use (building equipment, electricity/gas, steel, etc.) and marine-use (shipbuilding, marine exhaust gas, LNG fuel supply). Through customization, the company offers over 100,000 product variations, with overseas sales accounting for approximately 20% of total sales. Consolidated subsidiaries are located in Malaysia and China.

Recent Overview

Operating profit rose 65% on substantial growth in the marine-use market and improved profitability of LNG valves

In FY2026 (ending March 2026), net sales rose to ¥11,114 million (up 6.5% year on year), with operating profit surging 65.3% year on year to ¥1,295 million. The marine-use market drove results, with sales of ¥6,423 million (up 18.4% year on year), supported by the consumption of the order backlog and demand for newly built vessels. Meanwhile, the land-use market saw sales of ¥4,691 million (down 6.4% year on year), reflecting a reaction to a large-scale order in the prior period. Following a review of the new core system plan, the company recorded an impairment loss of ¥68 million and a contract cancellation loss of ¥98 million as extraordinary losses. For the following fiscal year (FY2027, ending March 2027), the company expects net sales of ¥11,900 million (up 7.1% year on year), while forecasting operating profit of ¥1,060 million (down 18.2% year on year) due to increased personnel expenses and other factors.

Key Products

Growth Drivers

• Rising demand for newly built vessels in the marine-use market driven by demand to replace aging ships and increasing global cargo volumes
• Expanding demand for Marine Exhaust Gas Valves, driven mainly by demand for power generation auxiliary equipment, supported by an extensive delivery track record and strong support capabilities
• Expansion of the customer base for LNG Valves used in FGSS for LNG-fueled vessels, and improved profitability
• Improved profitability through increased sales of high-value-added and customized products
• Advancement of the three basic strategies of the Second Medium-Term Management Plan (FY2026–FY2028, ending March 2028): 'expansion of existing business areas,' 'expansion into overseas markets,' and 'challenge into new business areas'
• Advancement of the medium- to long-term vision 'Create200,' targeting consolidated net sales of ¥20.0 billion and operating profit of ¥2.0 billion in FY2031 (ending March 2031)

Risks

• Costs recognized in connection with the revision of the new core system migration plan (impairment loss of ¥68 million and contract cancellation loss of ¥98 million) and future restructuring costs
• Elevated material prices and energy costs, along with increased personnel expenses due to wage increases (a main factor behind the projected 18.2% decline in operating profit for the following fiscal year)
• Risk of order size becoming smaller and volatility in orders for large-scale projects in the land-use market
• Foreign exchange risk (a foreign exchange loss of ¥55 million affected ordinary profit in the current period)
• Price competition in the Marine Exhaust Gas Valve market from overseas competitors
• Risk of sales concentration among major customers (Metal One, Eiwa, Yuasa Trading, etc.)
• Sustainability of sales growth from the following fiscal year onward, given a slight decline in orders received of 0.4% year on year