26 major general contractors / April-September 2010 financial results, sales increased, but operating income decreased at 15 companies
The financial results for the period from April to September 2022 for 26 major general contractors were released on the 11th. Consolidated sales increased significantly compared to the same period of the previous year due to the steady completion of work on hand. On the other hand, the impact of material price hikes was conspicuous, and profit margins declined due to increased construction costs and other factors. Operating profit, which indicates profit from the main business, decreased at 15 companies. Many companies have revised their earnings forecasts for the full year, and it seems that they will be required to make further efforts to improve productivity and reduce costs.
Consolidated sales increased for 20 of the 25 companies, excluding Inphronia Holdings (HD), which was established in October last year. Factors that contributed to the decrease in revenue were "slow progress of work on hand due to suspension of construction work" (Kumagaigumi) and "delayed start of some construction work" (Toa Construction Industry).
While sales are growing, it has become apparent that the company is struggling to maintain the level of operating income. One of the factors is the rise in construction prices, which exceeds expectations, mainly in the construction business. Toda Construction Co., Ltd., whose construction costs increased in multiple projects, and Sumitomo Mitsui Construction Co., Ltd., which incurred unexpected costs due to rising material prices and revisions to construction plans for large-scale domestic construction projects, recorded a provision for construction losses. 10 companies saw an increase in operating income, such as "In addition to record-high sales growth, the development business in the United States also continued to perform well" (Kashima) and "Gross profit increased due to property sales" (Fujita).
The gross profit (gross profit) rate for completed construction work on a non-consolidated basis also continues to fly low. Kajima, Haseko Corporation, Maeda Corporation (Infronia HD), Hazama Ando, Okumura Gumi, Toyo Construction, Totetsu Kogyo, and P.S.
Non-consolidated orders, which are a leading indicator of performance, were strong due to the steady progress of public works and the recovery of private capital investment from the corona crisis. Many general contractors expect ``strong demand to continue,'' and aim to win orders with an emphasis on profitability, such as ``strengthening cost management by appropriately factoring in the risk of rising prices at the estimate stage,'' according to Toda Corporation.
Kashima and Okumura have revised upward their sales and profits in the full-year consolidated earnings forecast. Obayashi Corporation, Infronia HD, Toda Corporation, Penta-Ocean Construction, Sumitomo Mitsui Construction, Kumagai Gumi, Hazama Ando, Tokyu Construction, and Toa Corporation have revised their profit forecasts downward due to worsening profitability. A second-tier general contractor says, ``Price increases are being passed on through additional contracts, etc.,'' but the situation is likely to remain severe for the time being.
