Miki Kogyo H1 Revenue Jumps 25% to ¥19.9 Billion but Operating Profit Falls 12% on Cost and Wage Pressure

Miki Kogyo Co., Ltd. (TSE: 1718), a Himeji-based construction group active in gas piping and renewal works and, through subsidiary Sekisui Heim Sanyo Co., Ltd., in housing, reported consolidated results for the first half of the fiscal year ending December 2026 — the six months from January 1 to June 30, 2026 — under Japanese GAAP. Revenue rose 24.9% to ¥19,902 million, but operating profit fell 11.9% to ¥944 million and ordinary profit dropped 12.1% to ¥924 million. Net profit attributable to owners of the parent for the interim period was almost unchanged at ¥668 million, down 1.2%, helped by a gain on the sale of a rental property that lifted profit before income taxes to ¥1,033 million.

Operating conditions were mixed. Public investment and private capital spending stayed firm, but the construction industry continued to absorb rising material prices and labour costs, an unstable procurement environment, and higher financing costs as interest rates climbed. Miki Kogyo said it won work steadily on the back of stable gas-piping and renewal orders and a push to strengthen its Tokyo branch.

Construction volume surges, margins do not

The Construction segment lifted revenue 45.1% to ¥13,928 million as work carried over from the previous year-end progressed well and the handover of a whole-building condominium sale was completed. Segment operating profit nonetheless slipped 2.9% to ¥832 million, squeezed by higher material prices and by increased personnel costs following a revision to the company's human-resources and pay system. Segment operating profit figures include inter-segment transactions.

Housing slips against a strong base

The Housing segment posted revenue down 5.7% to ¥5,856 million and operating profit down 49.9% to ¥105 million. Subsidiary Sekisui Heim Sanyo delivered fewer units than a year earlier, when a new residential subdivision drove a spike in handovers, and a worse materials-procurement environment delayed unit-house handovers in the period. The Other segment was small, with revenue of ¥117 million (−3.7%) and operating profit of ¥3 million, up 172.5% on cost reductions.

Cash generation turns strongly positive

Operating cash flow swung to an inflow of ¥4,472 million from an outflow of ¥1,145 million a year earlier, driven by ¥1,033 million of pre-tax profit, a ¥2,315 million fall in trade receivables and a ¥1,647 million fall in inventories. Investing activities produced an inflow of ¥1,002 million (versus ¥252 million), including ¥956 million of proceeds from the sale of property, plant and equipment and ¥172 million from time-deposit redemptions, against ¥101 million spent on investment securities. Financing activities used ¥4,451 million (versus an inflow of ¥1,613 million), reflecting a ¥3,170 million reduction in short-term borrowings and ¥854 million of long-term debt repayment. Cash and equivalents ended the period at ¥3,854 million, against ¥3,116 million a year earlier.

The balance sheet contracted on both sides. Total assets fell to ¥34,727 million from ¥38,882 million at December 31, 2025, as receivables and completed-work receivables were collected. Total liabilities dropped to ¥14,893 million from ¥19,350 million, as the surplus cash from those collections repaid short-term and current-portion long-term borrowings. Net assets edged up to ¥19,834 million from ¥19,532 million on retained earnings.

Guidance unchanged

Management said results were broadly in line with its expectations and left the full-year forecast unchanged from the guidance published on February 13, 2026 alongside the FY12/2025 results.

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