Securities Report – 77th Fiscal Period (2025/04/01 – 2026/03/31)

Sada Construction Co., Ltd. Securities Report – 77th Fiscal Period (2025/04/01 – 2026/03/31)

During the 77th fiscal period, the company continued stable operations while striving to enhance financial transparency. This report is prepared under the Financial Instruments and Exchange Act to provide shareholders and investors with accurate and timely information on the company’s management, financial position, and performance trends.

The company’s management policy for the period focused on delivering construction services that contribute to a sustainable society. Key initiatives included the adoption of environmentally conscious construction technologies, advanced site management using digital twin systems, and the development of young technical personnel. In response to aging infrastructure and enhanced disaster resilience requirements, the company expanded its public works contracts. In the private sector, it improved customer satisfaction through high-quality design and construction of RC and steel-frame buildings.

Financially, total assets at the end of the period reached 184.2 billion yen, a 2.3% increase from the previous year. Total liabilities amounted to 1.105 trillion yen (+1.8% year-on-year), while net assets stood at 73.7 billion yen (+3.2%), maintaining a solid equity ratio of 40.0%. Revenue increased by 4.1% year-on-year to 168 billion yen. Operating profit rose 5.7% to 12.8 billion yen, and net profit for the period grew 6.3% to 8.9 billion yen, driven by improved contract pricing and construction efficiency.

Cash flow from operating activities increased by 12.4% to 15.2 billion yen. Investment activities saw cash outflows of 9.8 billion yen for capital expenditures. However, by limiting treasury stock purchases, cash flow from financing activities remained positive. Dividends are projected at 32 yen per share annually (14 yen interim, 18 yen final), an increase of 2 yen from the previous year.

For the 78th fiscal period, the company forecasts revenue of 175 billion yen, operating profit of 13.5 billion yen, and net profit of 9.5 billion yen. This outlook is supported by increasing redevelopment projects in the Tokyo and Kansai regions and rising infrastructure investment by local governments. The full-scale deployment of an integrated BIM/CIM platform in FY2025 is expected to reduce design change costs and shorten project timelines, further enhancing profitability.

Key risks include fluctuations in raw material prices, rising labor costs, weather-related construction delays, and natural disasters such as earthquakes and typhoons. The company mitigates these through long-term material procurement contracts, strengthened collaboration with subcontractors, and regular reviews of its Business Continuity Plan (BCP).

In ESG initiatives, the company aims to reduce CO2 emissions by 30% by 2030 compared to 2019 levels. Measures include solar panel installations, electric construction machinery, and strict implementation of energy-saving construction manuals. The company is also promoting diversity through increased hiring of female engineers and improving workplace environments.

Going forward, the company will continue to prioritize safety, quality, and environmental stewardship, further strengthening trust with all stakeholders.