Raito Kogyo Co., Ltd. (TSE: 1926), a specialist civil-engineering contractor focused on slope stabilisation, ground improvement and foundation work, reported consolidated first-quarter results for the three months to June 30, 2026 under Japanese GAAP. Net sales fell 3.3% to ¥29,522 million, but gross profit rose 11.5% to ¥6,672 million, operating profit climbed 19.5% to ¥3,329 million, ordinary profit advanced 22.7% to ¥3,448 million and net profit attributable to owners of the parent rose 17.4% to ¥2,295 million. Earnings per share were ¥55.41, up from ¥44.36. Comprehensive income jumped 58.3% to ¥2,717 million.
Order intake jumps 42% to a quarterly record
The standout figure was order intake. New orders received in the quarter totalled ¥69,958 million, up 42.3% from ¥49,160 million a year earlier, and the order backlog carried forward swelled to ¥132,403 million from ¥105,904 million — roughly a full year of revenue at the current run-rate. Slope and embankment protection orders rose to ¥20,509 million from ¥13,386 million, repair and reinforcement work more than doubled to ¥3,970 million from ¥1,653 million, and environmental remediation orders more than doubled to ¥1,198 million from ¥559 million. Building construction orders were the single largest swing factor, at ¥17,646 million against ¥6,128 million a year earlier. Foundation and ground-improvement orders were broadly flat at ¥24,999 million versus ¥25,769 million, general civil engineering came in at ¥948 million and other work at ¥686 million.
Why revenue fell even as margins improved
The core in-house civil-engineering business was solid, but building construction faced a reaction to unusually large prior-year projects and delayed starts on some contracts already on hand, while the company's U.S. subsidiary also lapped large prior-year projects. By work type, quarterly revenue comprised foundation and ground improvement of ¥14,582 million, slope and embankment protection of ¥8,268 million, building construction of ¥2,702 million, repair and reinforcement of ¥2,248 million, general civil engineering of ¥838 million, environmental remediation of ¥424 million, other work of ¥419 million and merchandise and materials sales of ¥37 million. The shift toward higher-margin in-house civil work is what allowed gross profit to grow 11.5% on a smaller top line, and operating profit to outpace it.
A supportive ordering environment
Management described the operating backdrop as favourable. Private non-residential construction investment stayed firm on the back of solid corporate earnings and labour-saving capital spending driven by worker shortages, while government construction investment — centred on disaster prevention and mitigation, national resilience and the renewal of ageing infrastructure — remained resilient. That combination underpins the order surge and gives visibility well beyond the current fiscal year.
Balance sheet
Total assets stood at ¥115,750 million at the end of June, down from ¥125,930 million at the fiscal year-end, reflecting the seasonal collection cycle typical of Japanese construction contractors. Net assets were ¥85,354 million against ¥90,886 million, and shareholders' equity ¥84,459 million against ¥90,005 million. The equity ratio nevertheless improved to 73.0% from 71.5%, an unusually strong capital position for the sector. Book value per share was ¥2,056.96, down from ¥2,141.13.
4-for-1 stock split and a revised dividend plan
Raito Kogyo will carry out a 4-for-1 split of its common shares effective October 1, 2026, a move that lowers the investment unit and should broaden the shareholder base. The company also revised its dividend forecast. For FY3/2026 it paid an interim dividend of ¥40.00 and a year-end dividend of ¥105.00, for an annual total of ¥145.00. For FY3/2027 it plans an interim dividend of ¥40.00 on a pre-split basis and a year-end dividend of ¥26.50 adjusted for the split; no annual total is presented, because the split makes a simple year-on-year comparison impossible.
Full-year guidance left unchanged
Despite the strong start, management left its forecasts untouched. For the first half it guides net sales of ¥65,500 million (+0.7%), operating profit of ¥7,400 million (+7.1%), ordinary profit of ¥7,700 million (+8.7%) and net profit of ¥5,300 million (+5.7%), with EPS of ¥31.52 on a split-adjusted basis (¥126.08 before the split). For the full year to March 2027 it guides net sales of ¥138,000 million (−0.9%), operating profit of ¥16,850 million (−2.0%), ordinary profit of ¥17,300 million (−2.3%) and net profit of ¥11,800 million (−5.5%), with EPS of ¥70.18 after the split (¥280.71 before it). With a quarter of the year gone, first-quarter operating profit already covers about 20% of the full-year target, and the record backlog leaves scope for the guidance to prove conservative.
| Metric | Q1 FY3/27 | Q1 FY3/26 | YoY |
|---|---|---|---|
| Net sales (¥ million) | 29,522 | 30,520 | -3.3% |
| Operating profit (¥ million) | 3,329 | 2,785 | +19.5% |
| Ordinary profit (¥ million) | 3,448 | 2,809 | +22.7% |
| Net profit attrib. to owners (¥ million) | 2,295 | 1,955 | +17.4% |
| Basic EPS (¥) | 55.41 | 44.36 | +24.9% |
| Orders received (¥ million) | 69,958 | 49,160 | +42.3% |
| Order backlog (¥ million) | 132,403 | 105,904 | +25.0% |
| FY3/27 net sales guidance (¥ million) | 138,000 | — | -0.9% |
| FY3/27 operating profit guidance (¥ million) | 16,850 | — | -2.0% |
| FY3/27 net profit guidance (¥ million) | 11,800 | — | -5.5% |
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.