Hitachi Construction Machinery Co., Ltd. (TSE: 6305), a major maker of construction and mining equipment — hydraulic excavators, wheel loaders, dump trucks and mining machinery — reported consolidated full-year results for the fiscal year ended March 31, 2026 (FY3/2026) under IFRS. Revenue rose 2.5% year-on-year to a record ¥1,405,493 million, but adjusted operating profit — the company's headline profit metric, defined as revenue less cost of sales and SG&A — fell 8.3% to ¥132,951 million from ¥144,989 million. Profit before tax declined 7.4% to ¥124,226 million, and profit attributable to owners of the parent fell 10.1% to ¥73,193 million from ¥81,428 million. Basic earnings per share came in at ¥344.06 versus ¥382.83.
Record revenue, but margins compress
The defining feature of the year was the gap between a record top line and a softer bottom line. Revenue reached an all-time high of ¥1.41 trillion, yet adjusted operating profit retreated 8.3% as product mix, regional pricing and currency movements weighed on margins. Profit before tax slipped 7.4% to ¥124,226 million, profit including non-controlling interests fell 9.9% to ¥82,688 million, and the share attributable to the parent's owners declined 10.1% to ¥73,193 million. The company reports under IFRS, uses "adjusted operating profit" as its principal earnings gauge, and has classified certain non-core Specialized Parts & Service operations as discontinued.
Cash generation rises, balance sheet strengthens
Despite the softer profit, cash generation improved markedly. Operating cash flow rose to ¥164,223 million from ¥143,932 million a year earlier. Total assets stood at ¥1,857,321 million and total equity at ¥955,670 million, with equity attributable to owners of the parent of ¥900,166 million. The owners'-equity ratio strengthened to 48.5% from 45.2%, and book value per share reached ¥4,231.37. The stronger balance sheet and higher cash flow give the company ample flexibility to fund investment and shareholder returns even as profit dipped.
Annual dividend raised to ¥190
The board raised the FY3/2026 annual dividend to ¥190.00 per share (¥90.00 interim plus ¥100.00 year-end), up from ¥175.00 the previous year, for a payout ratio of about 50.9%. The increase, delivered in a year of declining earnings, underscores management's commitment to progressive shareholder returns backed by the company's strengthened balance sheet and robust operating cash flow.
FY27 guidance points to recovery
For the fiscal year ending March 31, 2027 (FY3/2027), management guides for a recovery across the board. Revenue is seen rising 1.7% to ¥1,430,000 million, adjusted operating profit up 5.3% to ¥140,000 million, profit before tax up 7.1% to ¥133,000 million, and profit attributable to owners up 9.3% to ¥80,000 million, with EPS of ¥376.06. The guidance signals management's confidence that this year's margin pressure was largely cyclical and currency-driven, with a return to profit growth expected as conditions normalize.
| Metric | FY3/2026 | FY3/2025 | YoY |
|---|---|---|---|
| Revenue (¥M) | 1,405,493 | 1,371,285 | +2.5% |
| Adjusted operating profit (¥M) | 132,951 | 144,989 | -8.3% |
| Profit before tax (¥M) | 124,226 | 134,168 | -7.4% |
| Profit attrib. to owners (¥M) | 73,193 | 81,428 | -10.1% |
| Basic EPS (¥) | 344.06 | 382.83 | -10.1% |
| Owners' equity ratio | 48.5% | 45.2% | +3.3pp |
| Annual dividend (¥) | 190.00 | 175.00 | +8.6% |
JapanStockPulse provides informational content only and does not constitute investment advice. Figures are taken from the company's published earnings short report and may be subject to subsequent revision.