OHBA CO., LTD.

Business Details

The Group is a single-segment corporate group comprehensively engaged in geospatial information services, environmental services, urban development (machizukuri) services, design services, and business solutions services. Serving both government and private-sector clients, it provides high-value-added services such as disaster prevention and mitigation, national resilience, land readjustment project administration proxy services, civil engineering asset management, and PM/CM and PFI projects. In FY2026 (ending May 2026), net sales decreased 6.0% year on year, but improvement in gross margin (from 31.7% to 34.2%) enabled increases in operating income, ordinary income, and net income.

Recent Overview

Net sales declined 6.0% year on year, but margin improvement drove increases in operating income, ordinary income, and net income

In FY2026, ending May 2026, net sales declined to ¥17,011 million (down 6.0% year on year), but gross margin improved to 34.2% (from 31.7% in the prior period), and operating income increased to ¥1,965 million (up 1.5%), ordinary income increased to ¥2,141 million (up 7.2%), and net income increased to ¥1,468 million (up 10.1%). Net sales in the business solutions services declined sharply to ¥929 million (from ¥1,969 million in the prior period), but margins improved substantially to 31.7% (from 20.1%). Operating cash flow improved significantly to income of ¥2,065 million (compared with an outflow of ¥510 million in the prior period). Order backlog rose slightly to ¥9,584 million (from ¥9,458 million). For FY2027, ending May 2027, the company forecasts net sales of ¥17,500 million and operating income of ¥2,050 million.

Key Products

Growth Drivers

• Steady trend in government demand for disaster prevention/mitigation, national resilience, and defense civil engineering (expansion of work related to strengthening Self-Defense Forces facilities against a backdrop of increased defense budgets)
• Increase in private-sector demand related to industrial site and logistics site development driven by reshoring of production bases to Japan and inbound foreign capital investment
• Growth in business solutions services through continued receipt of orders for large-scale land readjustment projects and launch of new districts
• Expansion of revenue opportunities through strengthened efforts in consulting services such as administration proxy work, civil engineering asset management, and inherited real estate consulting
• Deployment of high-value-added services such as urban development DX, PPP/PFI, and concessions based on the medium-term management plan (90th to 94th fiscal periods)

Risks

• Net sales in FY2026, ending May 2026 declined 6.0% year on year to ¥17,011 million, and the FY2027, ending May 2027 forecast (¥17,500 million) remains below the FY2025, ending May 2025 actual result (¥18,096 million)
• Net sales in the business solutions services declined sharply by 52.8% year on year to ¥929 million, indicating volatility risk in revenue scale associated with participation in administration proxy work
• Pressure on margins from rising costs such as personnel expenses and outsourcing expenses (selling, general and administrative expenses increased ¥51 million year on year to ¥3,856 million)
• Orders received softened in key business categories, with urban development services at 91.2% and design services at 84.8% of the prior-year level
• Equity ratio declined from 71.0% to 68.9%, due to factors including an increase in deferred tax liabilities associated with an increase in retirement benefit assets