To our shareholders and investors

Kazuyuki Inoue

Creating value that surpasses the
expectations of society
to contribute to
sustainable future development

Creating value that surpasses the expectations of society to contribute to sustainable future development

Consolidated results for FY2022 include the results of the Nippon Road Co., Ltd., which was made a subsidiary last March, and show an increase in both sales and income compared to the previous year with net sales of 1,933.8 billion yen, ordinary income of 56.5 billion yen, and net income of 49.0 billion yen.
Capital investment by companies is currently picking up, and profit margins on orders are recovering. However, the difficult conditions for earning a profit are expected to continue as some unprofitable large-scale construction works are still to be completed. In addition, there is an urgent need to address not only rising material prices and labor expenses but also the so-called “2024 problem,” where an upper limit will be placed on overtime work, and the future shortage of workers. The industry will be required to take even stricter measures in the future, but to remain as a sustainable company, we will carry out ceaseless efforts in cooperation with the Japan Federation of Construction Contractors, an industry organization.

This fiscal year is the final year of our Mid-Term Management Plan (2019-2023), which began in fiscal 2019 so we are now in the process of putting together our next Mid-Term Management Plan. The business environment has changed significantly since the current plan was established. As such, we will put together the next Mid-Term Management Plan based on a careful examination of the current situation.

On April 26, 2023, we announced plans for the repurchase of 20.0 billion yen of our treasury stock, cancellation of our treasury stock, a target to reduce securities holdings within 20% of consolidated net assets and the continuation of treasury stock repurchases, and ongoing consideration of raising the consolidated dividend payout ratio from the current level of 30%. To meet the expectations of our stakeholders, we will continue to improve capital efficiency and enhance shareholder return.

The severe business environment will likely continue this fiscal year. Still, we will strive to further cultivate and improve our construction business, establish a revenue base for our non-construction businesses, and strengthen the management foundation to support growth based on the measures outlined in our Mid-Term Management Plan. At the same time, we aim to fulfill our social responsibility through our business activities and realize sustainable growth and enhanced corporate value. For this reason, as well, our most pressing issue is securing revenue in our core construction business. As such, we will further sharpen our focus on profitability and strive to enhance our earning power.

Kazuyuki Inoue
President and Representative Director
Shimizu Corporation
May 2023