Ando Hazama Q1 FY2027: Record Q1 Profit as Building Orders Surge

For the three months ended June 30, 2026, consolidated revenue rose 12.4% year on year to ¥105,004 million, while operating profit grew 22.3% to ¥6,484 million. Ordinary profit jumped 41.7% to ¥6,336 million, and net profit attributable to owners of the parent climbed 34.9% to ¥4,237 million. The operating profit margin improved 0.5 percentage points to 6.2%. The sharp increase in ordinary profit was largely due to a significant reduction in non-operating expenses, such as foreign exchange losses and equity-method investment losses that had weighed on the year-earlier period.

On an individual basis, construction order intake surged 188.3% to ¥133.9 billion, driven by large-scale building projects, pointing to strong revenue visibility ahead. Meanwhile, full-year guidance was unchanged: revenue is forecast at ¥490.0 billion (up 11.5% from the previous fiscal year), while net profit is expected to fall 25.4% to ¥22.2 billion, reflecting the absence of one-off gains from sales of investment securities booked in the prior year.

Group revenue and profit were heavily skewed toward the Building Construction segment, which more than offset a decline in Civil Engineering.

Civil Engineering revenue fell 10.5% to ¥28,710 million, and operating profit dropped 47.7% to ¥1,910 million, mainly due to project timing differences. However, orders surged 135.1% to ¥23.6 billion, driven by public-sector contracts, pointing to a recovery in the second half.

Building Construction was the standout performer, with revenue up 24.6% to ¥68,032 million and operating profit soaring 73.3% to ¥6,467 million. Order intake exploded 203.0% to ¥110.3 billion, fueled by strong private domestic demand and a string of large contracts, significantly expanding the segment's earnings base.

Group Businesses reported revenue up 27.2% and operating profit more than doubled, benefiting from increased project volume across subsidiaries. Other operations, including research and study contracts, also posted solid growth.

Total assets at June 30, 2026, stood at ¥411,976 million, up ¥0.4 billion from the end of the prior fiscal year. Net assets expanded by ¥7.4 billion to ¥216,843 million, lifted by a ¥9.3 billion increase in unrealized gains on available-for-sale securities. The equity ratio rose 1.8 percentage points to 52.4%. Interest-bearing debt was essentially unchanged at ¥27,477 million, leaving the company virtually net cash. Cash and deposits declined ¥1.7 billion to ¥64,463 million.

The company raised its annual dividend forecast by ¥4 to ¥84 per share (interim ¥42, year-end ¥42), a 5.0% increase from the prior year. This marks a continuation of its progressive dividend policy, with the payout ratio on the full-year net profit forecast coming to 37.6%.

The earnings release flags several downside risks: geopolitical tensions in the Middle East, financial market volatility that could dampen orders or asset values, and persistently high material and labor costs. While order intake is booming, the company must guard against margin erosion if construction input costs rise further. The largest factor behind the forecast 25.4% decline in full-year net profit is the absence of one-time investment gains recorded a year earlier, and sustaining profitability in the core construction business remains a priority.

The company kept its full-year consolidated forecasts unchanged from the May 14, 2026 announcement.

While revenue and operating profit are expected to edge up on robust building demand, net profit is forecast to decline sharply due to the absence of the prior year's extraordinary gains from the sale of investment securities.