TSUKISHIMA HOLDINGS CO., LTD.

Business Details

Provides design and construction of plants for water purification plants, sewage treatment plants, sludge recycling treatment, and biomass utilization; sale of standalone equipment such as dehydrators, dryers, and incinerators; public-private partnership businesses such as PFI/DBO/digestion gas power generation; and operation, maintenance, and repair of plants and equipment (lifecycle business). With demand for renewal of aging domestic water and sewage infrastructure as its main customer base, the business scale and competitiveness were significantly strengthened through the integration of JFE Engineering's domestic water engineering business in October 2023.

Recent Overview

Revenue increased 6.4% year-on-year to a record high, but orders received decreased 31.6% due to a lull in large-scale projects

In the Water Environment Business for FY2026 (ending March 2026), revenue increased to ¥98,578 million (up 6.4% year-on-year), but operating profit declined to ¥5,805 million (down 5.4% year-on-year). Orders received decreased significantly to ¥93,600 million (down 31.6% year-on-year), which was attributed to a lull between large-scale projects, while demand for equipment renewal and expansion is explained to remain solid. The order backlog remained at a high level of ¥271,543 million (down 1.8% from the end of the prior period). During the period, the company acquired shares in Higashi Nihon Engineering Co., Ltd., which operates water treatment and sewage treatment operation management businesses, aiming to strengthen its business foundation.

Key Products

Growth Drivers

• Continued expansion of demand for renewal and expansion accompanying the aging of domestic water and sewage infrastructure
• Increased orders and order expansion for public-private partnership businesses such as PFI/DBO/Water PPP
• Scale merit and technological synergy from the integration of JFE Engineering's domestic water engineering business in October 2023
• Accumulation of stable revenue through the lifecycle business based on multi-year contracts such as comprehensive O&M services and repair works
• Expansion of orders for decarbonization-related businesses such as sewage sludge incinerators and digestion gas power generation
• Strengthening of the business foundation for operation management operations through the acquisition of shares in Higashi Nihon Engineering Co., Ltd.

Risks

• Risk of fluctuation in orders received due to lulls between large-scale projects (sewage sludge incinerators, public-private partnership businesses) in the Water Environment Business (orders received in FY2026 (ending March 2026) decreased 31.6% year-on-year to ¥93,600 million)
• Shrinking domestic water infrastructure market size and intensifying competition due to medium- to long-term population decline
• Impact of soaring raw material prices and foreign exchange fluctuations on construction profitability
• Risk of construction delays and recording of provisions for construction losses due to the mainly make-to-order production model
• Risk of fixed asset impairment (an impairment loss of ¥180 million was recorded in the Water Environment Business in FY2026 (ending March 2026), an increase from ¥101 million in the prior period)
• Impact of price increases and foreign exchange fluctuations on economic activity