Plant and Offshore Engineering FY2026 Full Year: Margins set the leaders apart

The three companies have different fiscal year-ends, so the comparison below covers each company's most recent full-year results.

• Project execution and order intake shaped performance. MODEC benefited from progress on FPSO projects and higher orders, with its backlog at about ¥2.9 trillion.
• Selective bidding helped restore profitability. JGC's revenue fell 13.1% year on year, but it swung to operating profit of ¥35.4 billion from a loss in the prior year.
• Environmental demand and port investment provided support. Mitsui E&S captured demand for dual-fuel engines and port cranes, lifting revenue 12.1% year on year.
• Revenue scale and profitability told different stories. JGC had the highest revenue, but its operating margin was 4.7%. Mitsui E&S had the lowest revenue and the highest margin, at 10.7%.

Mitsui E&S stood out for profitability and operating profit growth. Operating profit rose 62.7% year on year to ¥37.6 billion, the fastest increase among the three. Its 10.7% operating margin also topped MODEC's 9.6%.

MODEC, however, had the highest operating profit, at ¥68.5 billion, ¥30.9 billion more than Mitsui E&S. Net profit rose 62% year on year to ¥56.5 billion. Progress on large FPSO projects and its backlog are supporting current earnings.

JGC faced the greatest challenges. It had the largest revenue among the three, at ¥745.3 billion, but that was down 13.1% year on year. Its 4.7% operating margin was 6.0 percentage points below Mitsui E&S's. Still, operating profit improved to ¥35.4 billion from a ¥11.4 billion loss in the prior year.

JGC's revenue declined as major overseas projects were completed. But selective bidding and cost controls restored profitability, turning operating profit positive. For the next fiscal year, the company forecasts revenue of ¥670 billion and operating profit of ¥40 billion. Revenue is expected to fall about 10% from this year, while operating profit is projected to rise about 13%.

MODEC recorded a 646.6% year-on-year surge in orders, alongside progress in FPSO construction. Its backlog of about ¥2.9 trillion offers support for future workloads. For the next fiscal year, it forecasts revenue of ¥720 billion and operating profit of ¥72 billion, both modest increases from this year.

Mitsui E&S grew sales of dual-fuel engines and port cranes. It also raised its annual dividend to ¥57 per share from ¥20 in the prior year. Its operating profit forecast for the next fiscal year is ¥32 billion, about 15% below this year. Revenue is expected to rise about 5%, showing that sales growth does not necessarily translate into higher profit.

JGC led in revenue, while Mitsui E&S topped the operating margin ranking. MODEC led in operating profit and, with its substantial backlog, demonstrated strength in both scale and profitability.

The simple average of the three companies' revenue growth rates was about 2.4%. That figure combines a decline at JGC with growth at the other two. Rather than reflecting uniform expansion across the industry, results differed according to project completion timing and business mix.

• Deteriorating economics on large projects. Delays and rising materials and labor costs can weigh on profit.
• Delays in customer investment decisions. At JGC, decisions on some projects were pushed into the next fiscal year or later.
• Foreign exchange and interest rate swings. These affect the yen value of overseas project and foreign-currency earnings, as well as financing costs.
• Uncertainty around the energy transition. Investment in fossil fuels and adoption of decarbonization equipment will shape the mix of orders.
• Reliance on large orders. Backlogs point to future work, but revenue and profit depend on projects being completed successfully.

Although all three companies are in machinery, their work differs. JGC focuses on the design and construction management of overseas plants, MODEC on FPSO design and construction, and Mitsui E&S on engines and port equipment.

Those interested in major overseas projects should also consider how locations and project schedules may affect working arrangements. Candidates drawn to decarbonization technology or maintenance services can compare each company's business mix and employee development to better understand the work they may do.