To Our Shareholders and Investors

In May 2024, we announced our new Mid-Term Business Plan〈2024－2026〉, which sets new management goals. The management figures in the previous Mid-Term Business Plan〈2019-2023〉were set back cast from the year 2030 to realize “how the company should be” set forth in our long-term vision, SHIMZ VISION 2030. However, during the past five years, in addition to the pandemic of COVID-19, the construction industry experienced changes in the external environment that had a significant impact on the company's management that were not anticipated at the time of formulation. Such as larger construction projects and soaring construction material and energy prices triggered by the situation in Ukraine and other factors. For these reasons, the company achieved its sales targets but fell short of its profit targets.

On the other hand, in the construction business, we are working on numerous large-scale projects, and in the non-construction business, we have built a SEP vessel and are utilizing them to construct offshore wind power generation facilities, established and managing private REIT, mainly for properties developed by the Company. Regarding management infrastructure, we have promoted various investments and measures, including the development and partial operation of “Smart Innovation Ecosystem NOVARE,” an innovation and human resources development facility in Koto-ku, Tokyo. In particular, our efforts in large-scale projects, such as the construction of the “Azabudai Hills,” have led to the development of cutting-edge technologies and the accumulation of project management know-how, which have been significant achievements that will lead to orders for the next large-scale project.

In the current consolidated business results for fiscal year 2023, the impact of soaring construction material prices, especially for large-scale projects, was a major factor in the downturn in business results, resulting in sales of 2,005.5 billion yen, ordinary income of -19.8 billion yen, and net income of 17.1 billion yen. In order to improve profitability of the construction business in particular, we are in the process of promoting company-wide efforts to tighten pre-contract screening, respond to quotation submission, and negotiate contract terms and conditions.

During the period of the Mid-Term Business Plan〈2024－2026〉, in addition to improving profitability and pursuing technology and quality in the construction business, we will strongly promote strategies suited to each business, and globally, we will pursue sustainable and stable business development rooted in each country where we operate. Also, we will steadily implement capital policies to achieve numerical management targets and investments for sustainable growth, including investments in business and human resources, as well as management that is conscious of the cost of capital and stock prices, with the aim of increasing corporate value.

We have a history, tradition, and technology of monozukuri（craftsmanship）that has been handed down for 220 years since our founding, and we must continue to firmly connect them to the future. To meet the challenges of the future, we have decided to tackle this challenge with a new mindset of “Choukensetsu”.

“Choukensetsu” refers to the concept of providing new value to our customers and society through our construction and other businesses while proactively exploring the essential needs and issues of our customers and society, based on the values we have cherished up to now and beyond the framework of our existing businesses and organizations, and growing together with our customers as a result.

With our Mid-Term Business Plan〈2024－2026〉and a new mindset, we have positioned fiscal year 2024 as a year of new beginnings, as we strive to provide value that exceeds the expectations of our customers and society.