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Greetings from the President
to Our Shareholders and Investors

Overview for Fiscal Year

During the consolidated fiscal year 2025 (from April 1, 2025 to March 31, 2026), the domestic economy showed signs of a gradual recovery, supported by improvements in employment and income conditions and the effects of various government policies. However, downside risks to the economic outlook became more pronounced, reflecting such factors as U.S. trade policies, rising energy prices resulting from the situation in the Middle East, and increasing uncertainty over logistics.

In the construction industry, rising construction material prices and tight labor supply–demand conditions, together with continued upward pressure on costs resulting from changes in the labor environment following the so-called “2024 problem,” continued to weigh on the business environment. In addition, continued close attention is required with respect to rising prices and supply delays for petroleum-derived construction materials in Japan resulting from the situation in the Middle East.

In May 2025, the Group announced the “Medium-Term Management Plan 2027,” under which it is working to enhance profitability by promoting “Vertical Expansion,” aimed at increasing the value provided at sales offices and construction sites, and “Horizontal Expansion,” aimed at deepening collaboration between the construction business and strategic businesses. In addition, the Group has identified the SECC (Smart Energy Complex City) business, the Environment and Energy Business (offshore wind power generation business), and the Overseas Business as key management businesses, and is implementing a growth strategy of making growth investments in these businesses to further strengthen its business foundation. While promoting these growth investments, the Group is also working to strengthen its investment processes, including setting a target ROIC (return on invested capital) of 5% or higher, in order to secure an ROE (return on equity) of 10% or higher over the medium to long term.

Under these circumstances, the Group thoroughly implemented a strategic order-taking policy in its construction business and focused on eliminating inefficiencies and reducing costs through front-loading in the design and construction planning stages, while working to improve productivity. As a result of these initiatives, both net sales and gross profit increased significantly year on year, and the strengthening of the Group’s earnings structure progressed steadily. The Group’s consolidated results for the fiscal year were as follows.

Consolidated net sales increased to ¥645.7 billion, up 10.1% year on year, mainly due to higher sales in the Company’s Architectural Construction Business and Domestic Group Companies Business reflecting the progress of large-scale construction projects, as well as increased sales resulting from the sale of real estate for sale by an overseas group company.

Gross profit increased to ¥92.2 billion, up 21.6% year on year, mainly due to improved profitability in the Company’s Architectural Construction Business and an increase in gross profit on sales of real estate for sale by an overseas group company.

Ordinary income increased to ¥43.9 billion, up 51.2% year on year, as dividend income from investment securities held by the Company and other items were recorded as non-operating income.

Profit attributable to owners of parent increased to ¥36.9 billion, up 46.8% year on year. Although impairment losses were recorded in the Domestic Investment and Development Business and other businesses, gains on the sale of investment securities were recorded as the Company proceeded with the sale of cross-shareholdings.