1717.T

• Overall Financial & Operational Milestones: All profit metrics from order gross profit to interim net income hit a first-half record high, absorbing one-time costs from Osaka branch relocation and employee compensation hikes for talent retention. The company won the ICPMA Awards 2025 for its Ghibli Park project support, received the 3rd-stage

Management maintains the full-year ordinary profit forecast from the beginning of the fiscal year, despite 10.5% YoY ordinary profit growth in the first half. While management expects continued strong demand for its orderer support services (as independent project delivery becomes increasingly difficult for public and private clients), it maintains a conservative outlook due to continued caution in private sector construction investment amid rising construction costs. The company confirms its plan for a 13th consecutive year of dividend increases, consistent with its policy: stable dividends with a set annual per-share lower bound, and additional dividends at a ~55% payout ratio if full-year profits exceed the published forecast.

• Office Business: Sales = 752 million yen, +40.5% YoY; Operating profit = 188 million yen, +137.2% YoY. Increased inquiries for high-complexity projects including large-scale simultaneous move-in to newly completed office buildings and lab facility construction amid sustained new office development and rising construction costs.
• CM (Construction Management) Business: Sales = 1.554 billion yen, +1.7% YoY; Operating profit = 429 million yen, -11.1% YoY. Growth driven by wins of multiple public sector projects including Ministry of Land, Infrastructure, Transport and Tourism bids, local government facilities, and national university educational facilities; profit decline due to higher personnel costs for talent recruitment.
• CREM (Corporate Real Estate Management) Business: Sales = 462 million yen, +14.0% YoY; Operating profit = 114 million yen, +18.0% YoY. Growth led by multi-site simultaneous renovation projects for large corporations and financial institutions leveraging the company's MPS platform, plus increased public sector inquiries for facility equipment upgrades such as mass gymnasium air conditioning replacements.
• DX Support Business: Sales = 217 million yen, +16.2% YoY; Operating profit = 37 million yen, +2.7% YoY. Inquiries grew as clients sought efficiency improvements for facility maintenance amid internal talent shortages, with revenue growth linked to increased MPS utilization in CREM Business; profit growth was muted by higher depreciation on system development costs.

• Rising construction costs and prolonged construction investment caution among private sector clients have contributed to a trend of growing total construction investment paired with declining new construction start areas, creating ongoing uncertainty for the company's order intake environment.
• Independent delivery of construction projects has become increasingly difficult for public and private orderers, leading to project launch delays and opportunity losses that negatively impact the company's order environment.
• The company frames current market shifts as structural changes to the construction market, not temporary conditions, requiring ongoing investment in business adaptation that carries inherent execution risk.

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