Notice Regarding Differences Between Earnings Guidance and Actual Results

Overview of Earnings

Regarding the variance between the consolidated earnings guidance and actual results for the fiscal year ending December 2025, net sales were 41,211 million yen compared to the previous forecast of 40,000 million yen, representing a 3.0% increase. Operating income was 6,121 million yen versus 5,100 million yen forecast, a 20.0% increase. Ordinary income rose 20.3% to 6,316 million yen from the forecasted 5,250 million yen. Net income attributable to owners of the parent also increased 20.1% from 3,650 million yen forecast to 4,384 million yen. Net income per share was 184.24 yen, higher than the previous forecast; however, caution is needed in comparison due to a stock split (1 share to 2 shares) conducted on January 1, 2026.

Reasons for Variance and Future Outlook

Net sales exceeded the previous forecast supported by favorable market conditions such as increased demand for update and maintenance of water infrastructure equipment in the engineering business, as well as growth in disaster prevention and mitigation demand. Improved profitability due to reduced construction costs also resulted in gross profit exceeding expectations, leading to better-than-forecast performance at all profit levels from operating income downward. Continuation of similar market conditions and profitability improvements is anticipated, though detailed outlook remains uncertain.