NICHIRYOKU CO.,LTD.

Business Details

A business that purchases cemetery plots from religious corporations, etc., or sells them to general customers as a sales agency. Handles diverse burial forms including general graves, tree burials, temple precinct cemeteries, and grave relocation (grave closure). Gravestones are procured to the company's specifications, and installation/construction work is outsourced. Also operates temple precinct cemeteries in partnership with 31 temples, mainly in the greater Tokyo metropolitan area. While demand is supported by an aging population, the segment faces structural challenges from a declining base of traditional general grave buyers and a continuing shift toward lower-priced tree burials.

Recent Overview

In FY2026 (ending March 2026), both net sales and profit declined sharply, with a rapid deterioration in profitability

Net sales for FY2026 (ending March 2026) (post-restatement) fell sharply to ¥556 million (down 18.7% year on year from ¥684 million), and segment operating profit dropped to ¥4 million (from ¥114 million in the prior period). A restatement was made in connection with a review of the valuation of guarantee deposits, resulting in a slight upward revision from the pre-restatement figures of ¥556 million in net sales and ¥1 million in segment income. The shift toward lower-priced products and the decline in inventory at major cemeteries are believed to have pressured earnings.

Key Products

Growth Drivers

• Underlying support for potential cemetery demand from the advancing aging of the population
• Expansion of demand for tree burials, communal graves, and grave relocation associated with growing "grave closure" needs
• Acquisition of new customers through the full-scale rollout of temple precinct cemeteries (partnership network of 31 temples in the greater Tokyo area)
• Strengthening of sales capability through renovation/expansion of existing cemeteries and joint development of temple precinct-type tree burials

Risks

• Decline in per-unit construction prices due to the structural decline in traditional general grave buyers and the shift to lower-priced offerings
• Decline in the number of sales due to reduced inventory at major cemeteries
• Difficulty escaping price competition (concentration of demand on low-priced products such as tree burials)
• Structural constraint whereby the company depends on sales agency operations because the Act on Cemeteries and Burials restricts cemetery management entities to religious corporations, etc.
• Risk of having to fulfill debt guarantees for religious corporations (guarantees related to ossuary development funding), which could strain the company's finances
• Uncertainty regarding the valuation estimate of guarantee deposits (an accounting risk that caused the restatement of this period's financial results)