MARUFUJI SHEET PILING CO.,LTD. Q4 FY2025 earnings call

• Company Overview & Core Mission

  • Marufuji Sheet Pile is a pioneering heavy temporary construction material firm founded in 1926, operating as an "underground engineering" company that provides sales, leasing, processing of heavy temporary construction materials for ground and foundation works, plus design and construction contracting for civil engineering and building foundation projects. It is approaching its 100-year anniversary and is pursuing a mid-term management plan to strengthen its core business for the next century.
  • The company serves both public civil engineering infrastructure projects (river/dam maintenance, disaster recovery, transport and energy infrastructure, aging infrastructure renewal) and private building projects (urban redevelopment, large-scale building foundation works), and has expanded into steel processing and environmental construction projects.

• Financial Position & Cash Flow

  • Cash and cash equivalents increased by 237 million yen year-over-year. Operating cash flow was positive driven by pre-tax profit and improved accounts receivable collection. Investment cash outflow came from purchases of construction machinery and investments to improve factory productivity, while financing cash outflow went toward dividend payments. The company funded capital investments and dividends from operating cash flow.
  • Total assets reached 43.969 billion yen, an increase of 624 million yen year-over-year, driven by higher construction material inventory, increased tangible fixed assets from capital investments, and higher retained earnings from net profit.

• Mid-Term Management Plan Progress

  • The 2024-2026 (ending March 2027) mid-term plan set a final target of 40 billion yen in total revenue and 2 billion yen in ordinary profit by the 2027 March fiscal year. After the first full year (2025 March), revenue progress hit 89% of target and ordinary profit progress hit 104% of target, putting the plan on track.
  • The plan is structured around three core pillars: business structure reform, growth, and management capability strengthening. Key priorities include core business base reinforcement, revenue structure transformation, active factory capital investment for productivity and maintenance capacity improvement, IT investment for process reform and technical capability growth, and human capital investment for talent development.

• Operational & Product Innovation Highlights

  • Launched M-craft, a BIM (Building Information Modeling) system specialized for the heavy temporary construction industry, which embeds the company's decades of technical expertise to enable high-precision design modeling independent of designer experience, improving process efficiency and client service quality as part of the company's DX strategy.
  • Upgraded its Landcross system bridge product line: developed a new intermediate panel for the strong-plate girder variant that now supports maximum span lengths of 28.0 meters, expanding applicability for temporary detour bridges, construction piers, and footbridges for aging bridge replacement projects.
  • Implemented factory automation to address aging workforce and future labor shortages: installed an automatic water washing and cleaning machine for sheet piles at the Nagoya factory, delivering a 20% production increase and labor savings, with plans to evaluate rollout to other factories. A new automated maintenance line for lining plates is under construction at the Ibaraki factory, planned to launch within the calendar year.
  • Strengthened processing revenue growth by expanding maintenance capacity, cultivating new outsourcing partners, and pursuing growth in specialized processing orders across railway and civil engineering segments. The company has maintained construction revenue above 1 billion yen for three consecutive years by focusing on high value-added construction methods, and will continue this strategy to stabilize this revenue level.

• Sustainability & ESG Initiatives

  • The company's core heavy temporary material leasing model is inherently environmentally friendly, centered on reuse and recycling of steel materials. The company has implemented optimized logistics management to reduce transport distances, cut CO2 emissions, and reduce driver workload.
  • Updated construction site uniforms after 20 years, using plant-derived stretch material that reduces CO2 emissions, with design focused on improved functionality, safety, and environmental performance.

For the 2025 March full year, Marufuji Sheet Pile reported total consolidated revenue of 35.58 billion yen, a 3% increase year-over-year, and ordinary profit of 2.07 billion yen, a 7.9% increase year-over-year. Revenue by business segment (product line):

• Sales revenue: Decreased year-over-year, as the company prioritized profitability and reduced low-margin sales volume.
• Leasing revenue: Increased year-over-year. The company implemented price adjustments amid persistently high steel procurement costs, growing revenue from its core construction material leasing business.
• Construction revenue: Increased year-over-year. The company focused on securing construction orders in collaboration with consolidated group subsidiaries, and construction revenue exceeded 1 billion yen for the 3rd consecutive fiscal year.
• Transportation revenue and processing revenue: Both increased year-over-year.

• For the next fiscal year (ending March 2026), management expects 2.9% revenue growth, 1.3% operating profit growth, and 1.1% ordinary profit growth from the 2025 March fiscal year. Net income attributable to parent shareholders is expected to decline 8.1%, which is solely due to the non-recurring impact of an 89 million yen gain on sales of investment securities recorded in the 2025 March fiscal year, with no underlying negative change to core profitability.
• Management expects sustained solid construction demand supported by government public investment for national resilience and aging infrastructure renewal, alongside continued urban redevelopment and private capital investment projects.
• The annual dividend for the 2025 March fiscal year was set to 130 yen per share, a 20 yen increase from the original plan. For the next fiscal year, the dividend per share will be maintained at 130 yen, aligned with the projected growth in top-line and core profit.

• Industry-wide risks facing the construction sector include persistent skilled labor shortages, aging of the construction workforce, persistently high steel prices, rising labor costs, and increased construction costs from overtime work cap regulations.
• These industry risks may lead to project start delays and slower project progress, which will increase pressure on profitability across the sector.
• The company faces internal operational risks from aging factory workforce and projected future labor shortages in production and maintenance operations, which it is addressing via automation investment.

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