MARUFUJI SHEET PILING CO.,LTD. Q2 FY2026 earnings call

Core Business and Mid-Term Strategy

• The company is a pioneer in heavy temporary construction material leasing, focused on underground foundation engineering for civil engineering and construction projects, approaching its 100th anniversary with the strategy of "Strengthen core business and create the next 100 years".
• Mid-term management plan (2024-2026) quantitative targets for the final fiscal year ending March 2027: 40 billion yen in net sales and 2 billion yen in recurring profit. As of fiscal year ending March 2025, the company was 89% toward the sales target and 104% toward the recurring profit target, on track to meet goals.

Operational Growth Initiatives

• Strengthened sales and expansion efforts in the specialty product segment, prioritized securing construction orders, and drove profitability-focused sales along with price adjustments and cost cutting to offset elevated construction costs.
• Expanded high-value construction methods: Scaled the eco-friendly, cost and time saving RG construction method in the Kanto region and is currently expanding order intake to Chubu and Kansai regions; strengthened specialized methods including AR Hammer, Gyro Press, TRD, and steel pipe pile installation for urban redevelopment, port/river, and aging infrastructure renewal projects.
• Strengthened temporary bridge order capabilities: Positioned to capitalize on growing demand from aging Japanese bridge infrastructure (59% of Japan's ~730,000 bridges will be over 50 years old by 2032) and disaster recovery work. The company is optimizing internal human resources, centralizing order information, and building coordinated response frameworks to improve national responsiveness for disaster recovery projects.

Factory Automation and Efficiency

• Addressed factory labor shortages and aging workforce via automation of material maintenance: Deployed a non-thermal attachment removal machine for laying iron plates at select factories to improve worker safety, efficiency, and reduce workload, with plans to evaluate expansion to other facilities.
• Is launching an automated 100-unit per day lining plate cleaning, painting, and drying line at the Ibaraki factory, scheduled to start operation in December 2025, which will reduce work time by 30% while improving both quality and safety.

Human Capital Investment

• Expanded recruitment and branding outreach: Runs university cafeteria tray ads to increase internship applications, publishes PR videos on YouTube, and launched one year of hanging strap ads on four Toei Subway lines starting October 2025 to raise brand awareness among potential new hires.
• Introduced a Restricted Stock (RS) compensation plan to attract top talent and improve employee engagement.
• Approved a plan to merge and relocate the head office and Tokyo branch (currently 300m apart) to a new intermediate office building, scheduled for March 2027. The consolidation will speed up decision making, improve operational efficiency, boost internal communication and workplace cohesion, and drive long-term growth and enterprise value improvement.

Marufuji Sheet Pile's total interim consolidated net sales for the period were 18.58 billion yen, an 11.1% increase year-over-year. The performance breakdown by revenue segment is as follows:

1. Sales revenue: 7.5% YoY growth; the company controlled low-margin sales volume while still growing revenue, aligned with its profitability-focused strategy.
2. Leasing revenue: 13.9% YoY growth, driven by successful price improvement initiatives for core on-site construction material leasing services.
3. Construction revenue: 15.8% YoY growth, achieved via increased focus on securing construction orders in partnership with group companies, especially in the specialty product segment.
4. Transportation and processing revenue: Positive growth, supported by company-wide price improvement efforts. The company's recurring profit was 1.11 billion yen, a 29.0% YoY increase.

• Full-year fiscal 2026 March term guidance is maintained as originally announced at the start of the period, with no upward or downward revision.
• The company projects 2.9% full-year net sales growth, 1.3% operating profit growth, and 1.1% recurring profit growth, and will continue profitability-focused sales and expansion efforts to hit these targets.
• The projected 8.1% YoY decline in net income attributable to parent shareholders is purely due to the reversal of the 89 million yen gain on sale of investment securities recorded as a special profit in the prior year, not a core operating decline.
• The interim dividend forecast is maintained: The company will keep the annual dividend per share at 130 yen, matching the increased dividend from the prior fiscal year ending March 2025.

• Persistently high raw material prices and rising labor costs are putting upward pressure on overall construction costs.
• The construction industry faces aging workers, widespread labor shortages, and tightening labor supply demand that are squeezing profitability.
• New overtime hour cap regulations applied to the construction industry increase the risk of project delays and project scope reviews, which could impact bottom-line profitability, and the company is closely monitoring these impacts.

No questions and answers section was included in the provided earnings call transcript.