Kraftia Q1 Net Profit Rises 9% to ¥8.42 Billion as Order Intake Jumps 16% to ¥146.4 Billion

Kraftia Corporation (TSE: 1959), the Kyushu-based electrical, air-conditioning and facilities engineering contractor, reported consolidated results for the first quarter of the year to March 2027 — the three months from April 1 to June 30, 2026 — under Japanese GAAP. The filing is issued in Japanese under the name 株式会社クラフティア, the company the market long knew as Kyudenko Corporation; no English romanisation other than the corporate web address, kraftia.co.jp, appears in the disclosure. Net sales fell 1.9% to ¥98,696 million and operating profit fell 3.3% to ¥10,731 million, but ordinary profit rose 4.0% to ¥12,212 million and profit attributable to owners of the parent rose 9.0% to ¥8,415 million. Quarterly earnings per share were ¥118.97, up from ¥109.14, and comprehensive income rose 11.3% to ¥9,226 million. The shares trade on the Tokyo Stock Exchange Prime Market and the Fukuoka Stock Exchange.

Orders outrun revenue

For a contractor, the order book matters more than a single quarter's revenue, and it moved sharply in the company's favour. Consolidated construction order intake rose 16.1% to ¥146,350 million from ¥126,056 million, which management attributed to redevelopment projects and logistics facilities in the Tokyo metropolitan area, the Kansai region and the Fukuoka city area, combined with the pass-through of higher input prices and selective order-taking matched to available construction capacity. Air-conditioning and piping works led the gain, with orders up 33.3% to ¥53,590 million; indoor wiring works rose 7.8% to ¥77,682 million and power distribution line works rose 9.1% to ¥15,077 million.

The order backlog at June 30, 2026 stood at ¥528,041 million, up 9.1% from ¥484,038 million a year earlier — more than a full year of the company's ¥500 billion full-year sales plan. Indoor wiring accounted for ¥341,758 million of that (+9.2%) and air-conditioning and piping ¥180,986 million (+9.5%), while the small distribution-line backlog slipped 8.8% to ¥5,296 million. Revenue lagged because a relatively large share of the big projects on the books were still at an early stage, so the volume that could be recognised as completed work was limited.

Air-conditioning works drag on the top line

By division, revenue was uneven. Power distribution line works rose 15.0% to ¥14,541 million and indoor wiring works rose 4.2% to ¥49,610 million, but air-conditioning and piping works fell 16.9% to ¥30,205 million — a ¥6.1 billion swing that accounted for the entire group decline and more. Facilities installation works as a whole came to ¥94,358 million (−2.3%), while other businesses — materials and equipment sales, real estate, renewable-energy generation, staffing, software development, environmental analysis, healthcare-related services, golf courses, business hotels and commercial-facility operation — grew 8.7% to ¥4,337 million.

On the reported-segment basis, the facilities installation segment earned ¥9,953 million, down 2.8% from ¥10,244 million, and the "other" grouping earned ¥741 million, up 9.5% from ¥677 million; inter-segment eliminations added ¥36 million against ¥176 million a year earlier. Notably, gross profit actually edged up to ¥19,249 million from ¥19,229 million on the lower sales base, lifting the gross margin to 19.5% from 19.1%; the operating-profit decline came from selling, general and administrative expenses, which rose to ¥8,517 million from ¥8,130 million. Work for the Kyushu Electric Power group — the company's anchor customer — rose 15.0% to ¥13,843 million, or 14.7% of construction sales, while work for general customers fell 4.8% to ¥80,515 million.

What lifted ordinary profit above operating profit

The gap between a 3.3% operating decline and a 4.0% ordinary gain sits entirely below the operating line. Non-operating income more than doubled to ¥1,725 million from ¥817 million. Dividends received were the largest single contributor at ¥997 million against ¥563 million; equity-method investment income was ¥172 million against ¥29 million, gains on investment partnerships ¥184 million against ¥3 million, and other income ¥274 million against ¥118 million. Non-operating expenses rose more modestly, to ¥244 million from ¥178 million, with interest paid at ¥162 million. Net of both, below-the-line items added ¥1,481 million to operating profit, against ¥639 million a year earlier.

Extraordinary items helped a little further: gains on the sale of fixed assets of ¥124 million and on the sale of investment securities of ¥184 million against extraordinary losses of ¥124 million. Pre-tax profit rose 5.5% to ¥12,396 million, and a lower effective tax rate — income taxes of ¥3,949 million, or 31.9% of pre-tax profit, against 34.1% a year earlier — carried the 9.0% gain through to the bottom line.

Balance sheet: receivables collected, equity ratio up

Total assets fell ¥30,115 million, or 5.8%, from the March 31, 2026 year-end to ¥493,153 million, driven overwhelmingly by the collection of receivables: notes and accounts receivable for completed construction dropped to ¥137,282 million from ¥177,386 million, while cash and deposits rose to ¥54,141 million from ¥51,939 million. Total liabilities fell ¥30,133 million, or 17.6%, to ¥141,490 million as trade payables were settled — notes and accounts payable for construction fell to ¥39,278 million from ¥65,050 million.

Net assets were essentially flat at ¥351,662 million, up just ¥17 million: the year-end dividend payment pulled retained earnings down to ¥300,865 million from ¥301,661 million, offset by a rise in unrealised gains on investment securities to ¥15,192 million from ¥14,416 million. The equity ratio improved to 70.5% from 66.4%, which reflects the shrinking balance sheet rather than any new capital. The company does not prepare a quarterly consolidated cash-flow statement; it disclosed depreciation of ¥1,924 million (against ¥1,671 million) and goodwill amortisation of ¥34 million (against ¥88 million).

Ukujima mega-solar inches forward

The filing repeated an update on the Ukujima mega-solar project off Nagasaki Prefecture, where a special-purpose generating company established chiefly with Kyocera and Kraftia is still negotiating with the prefecture and stakeholders over permission to occupy prefectural sea areas. As the project's EPC contractor, Kraftia acquired on May 1, 2026 the right to use the construction site for the Sasebo-side AC/DC converter station, which sits on the schedule's critical path; completion is now expected in fiscal 2027 or later. The SPC is separately examining a shift to Japan's FIP and PPA frameworks to improve the project's economics.

Guidance unchanged, dividend rebalanced across the halves

Management left the full-year FY3/2027 forecast published on April 28, 2026 untouched: net sales of ¥500,000 million (+5.0%), operating profit of ¥55,500 million (+1.6%), ordinary profit of ¥59,000 million (+1.4%), net profit of ¥40,500 million (+1.1%) and EPS of ¥572.54. The first quarter covered 19.7% of the sales target and 19.3% of the operating-profit target — an unremarkable start for a Japanese contractor, whose completions and profit recognition cluster in the second half. The full-year plan assumes divisional sales of ¥59,500 million from distribution lines, ¥255,000 million from indoor wiring and ¥167,000 million from air-conditioning and piping, plus ¥18,500 million from other businesses, on construction orders of ¥495,000 million.

The dividend forecast is also unchanged. Kraftia expects an annual dividend of ¥220.00 per share for FY3/2027, level with the ¥220.00 paid for FY3/2026 but split evenly at ¥110.00 interim and ¥110.00 year-end, against last year's ¥90.00 and ¥130.00. At forecast EPS of ¥572.54 that implies a payout ratio of roughly 38%. On a parent-only basis, sales fell 2.3% to ¥83,586 million, operating profit fell 10.2% to ¥9,006 million and ordinary profit fell 11.3% to ¥10,521 million — a reminder that a meaningful share of the group result now comes from subsidiaries and investments rather than the parent's own contracting book.

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.