Interim report
Page 1
Consolidated Financial Results for the Fiscal Year Ended December 31, 2025 [Japanese GAAP] February 13, 2026 Company name: CTI Engineering Co., Ltd. Stock exchange listing: Tokyo Stock Exchange Code number: 9621 URL: https://www.ctie.co.jp/ Representative: Tatsuya Nishimura, Representative Director and President, CEO Contact: Toshikazu Matsuoka, Director, Managing Executive Officer, serving as the Chief, Administration Headquarters Phone: +81-3-3668-4125 Scheduled date of annual general meeting of shareholders: March 27, 2026 Scheduled date of commencing dividend payments: March 30, 2026 Scheduled date of filing annual securities report: March 26, 2026 Availability of supplementary explanatory materials on financial results: Available Schedule of financial results briefing session: Scheduled (for analysts) (Amounts of less than one million yen are rounded down.) 1. Consolidated Financial Results for the Fiscal Year Ended December 31, 2025 (January 1, 2025 – December 31, 2025) (1) Consolidated Operating Results (% indicates year-on-year changes) Sales Operating income Ordinary profit Net income attributable to owners of the parent Fiscal year ended million yen % million yen % million yen % million yen % December 31, 2025 101,038 3.4 9,136 (2.8) 9,350 (1.9) 5,952 (11.8) December 31, 2024 97,678 5.0 9,396 (6.1) 9,535 (6.1) 6,746 (10.5) (Note) Comprehensive income: Fiscal year ended December 31, 2025: 7,639 million yen [(11.1)%] Fiscal year ended December 31, 2024: 8,595 million yen [(11.1)%] Net income per share Net income per share after adjustment of potential shares Ratio of net income to net worth Ratio of ordinary profit to total assets Ratio of operating income to net sales Fiscal year ended yen yen % % % December 31, 2025 214.45 – 9.3 10.2 9.0 December 31, 2024 243.10 – 11.6 11.4 9.6 (Reference) Share of profit (loss) of entities accounted for using equity method: Fiscal year ended December 31, 2025: – Fiscal year ended December 31, 2024: – (Note) The Company has conducted a 2-for-1 stock split of its common shares as of January 1, 2025. Net income per share was calculated on the premise that the stock split was conducted at the beginning of the previous fiscal year. Disclaimer: This document is an English translation of the original document in Japanese and has been prepared solely for reference purposes. In the event of any discrepancy between this English translation and the original in Japanese, the original shall prevail in all respects.
Page 2
(2) Consolidated Financial Position Total assets Net assets Net worth ratio Net assets per share million yen million yen % yen As of December 31, 2025 96,344 66,815 69.1 2,412.45 As of December 31, 2024 87,694 61,674 70.1 2,213.71 (Reference) Net worth: As of December 31, 2025: 66,529 million yen As of December 31, 2024: 61,453 million yen (Note) The Company has conducted a 2-for-1 stock split of its common shares as of January 1, 2025. Net assets per share were calculated on the premise that the stock split was conducted at the beginning of the previous fiscal year. (3) Consolidated Cash Flows Cash flow from operating activities Cash flow from investing activities Cash flow from financial activities Closing balance of cash and cash equivalents Fiscal year ended million yen million yen million yen million yen December 31, 2025 5,768 (612) (5,092) 15,093 December 31, 2024 2,410 (5,658) (2,111) 14,670 2. Dividends Annual dividends Total dividends (Total) Dividend payout ratio (Consolidated) Ratio of dividends to net assets (Consolidated) 1st quarter- end 2nd quarter- end 3rd quarter- end Year-end Total Fiscal year ended December 31, 2024 yen yen yen yen yen million yen % % – 0.00 – 150.00 150.00 2,082 30.9 3.6 Fiscal year ended December 31, 2025 – 0.00 – 75.00 75.00 2,068 35.0 3.2 Fiscal year ending December 31, 2026 (Forecast) – 0.00 – 78.00 78.00 30.5 (Notes) 1. The Company has conducted a 2-for-1 stock split of its common shares as of January 1, 2025. Dividends for the fiscal year ended December 31, 2024 are presented at pre -stock-split amounts actually paid , and dividends for the fiscal year ended December 31, 2025 are presented at post-stock-split amounts respectively. 2. The Company resolved to acquire treasury stock at the Board of Directors held on November 12, 2025 and resolved to dispose of treasury stock at the Board of Directors held on January 30, 2026. “Dividend payout ratio (Consolidated)” for the fiscal year ending December 31, 2026 ( Forecast) takes into account the acquisition and disposal. 3. Consolidated Financial Results Forecast for the Fiscal Year Ending December 31, 2026 (January 1, 2026 – December 31, 2026) (% indicates year-on-year changes) Sales Operating income Ordinary profit Net income attributable to owners of the parent Net income per share Full year million yen % million yen % million yen % million yen % yen 105,000 3.9 10,500 14.9 10,500 12.3 7,000 17.6 256.05 (Note) The Company resolved to acquire treasury stock at a meeting of the Board of Directors held on November 12, 2025 and resolved to dispose of treasury stock at a meeting of the Board of Directors held on January 30, 2026. “Net income per share” for the consolidated financial results forecast for the fiscal year ending December 31, 2026 takes into account the acquisition and disposal.
Page 3
* Notes: (1) Significant changes in the scope of consolidation during the period: None Newly included: – ( ), Excluded: – ( ) (2) Changes in accounting policies, changes in accounting estimates and retrospective restatement 1) Changes in accounting policies due to the revision of accounting standards: Yes 2) Changes in accounting policies other than 1) above: None 3) Changes in accounting estimates: None 4) Retrospective restatement: None (3) Total number of issued and outstanding shares (common shares) 1) Total number of issued and outstanding shares at the end of the period (including treasury shares): December 31, 2025: 28,318,172 shares December 31, 2024: 28,318,172 shares 2) Total number of treasury shares at the end of the period: December 31, 2025: 740,575 shares December 31, 2024: 557,716 shares 3) Average number of shares during the period: Fiscal year ended December 31, 2025: 27,755,043 shares Fiscal year ended December 31, 2024: 27,749,982 shares (Note) The Company has conducted a 2-for-1 stock split of its common shares as of January 1, 2025. The total number of issued and outstanding shares (common shares) was calculated on the premise that the stock split was conducted at the beginning of the previous fiscal year. [Reference] Overview of Non-consolidated Financial Results 1. Non-consolidated Financial Results for the Fiscal Year Ended December 31, 2025 (January 1, 2025 – December 31, 2025) (1) Non-consolidated Operating Results (% indicates year-on-year changes.) Sales Operating income Ordinary profit Net income Fiscal year ended million yen % million yen % million yen % million yen % December 31, 2025 60,969 2.6 8,520 0.2 8,947 0.2 5,908 (9.6) December 31, 2024 59,405 3.4 8,499 (0.7) 8,932 0.2 6,532 (1.8) Net income per share Net income per share after adjustment of potential shares Fiscal year ended yen yen December 31, 2025 212.88 – December 31, 2024 235.41 – (Note) The Company has conducted a 2-for-1 stock split of its common shares as of January 1, 2025. Net income per share was calculated on the premise that the stock split was conducted at the beginning of the previous fiscal year.
Page 4
(2) Non-consolidated Financial Position Total assets Net assets Net worth ratio Net assets per share million yen million yen % yen As of December 31, 2025 72,267 57,043 78.9 2,068.47 As of December 31, 2024 67,383 53,720 79.7 1,935.13 (Reference) Net worth: As of December 31, 2025: 57,043 million yen As of December 31, 2024: 53,720 million yen (Note) The Company has conducted a 2 -for-1 stock split of its common shares as of January 1, 2025. Net assets per share were calculated on the premise that the stock split was conducted at the beginning of the previous fiscal year. 2. Non-consolidated Financial Results Forecast for the Fiscal Year Ending December 31, 2026 (January 1, 2026 – December 31, 2026) (% indicates year-on-year changes) Sales Ordinary profit Net income Net income per share Full year million yen % million yen % million yen % yen 62,000 1.7 9,600 7.3 6,700 13.4 245.08 (Note) The Company resolved to acquire treasury stock at the Board of Directors held on November 12, 2025 and resolved to dispose of treasury stock at the Board of Directors held on January 30, 2026. “Net income per share” for the fiscal year ending December 31, 2026 (Forecast) takes into account the acquisition and disposal. * These consolidated financial results are outside the scope of audit by certified public accountants or an audit firm. * Explanation of the proper use of financial results forecast and other notes Financial results forecast and other forward-looking statements made in this document are based on the information currently available to the Company and certain assumptions deemed reasonable. As such, various factors could cause actual results to differ materially from those discussed in the forward -looking statements. For the assumptions underlying the financial results forecast and notes on the use of financial results forecast, please refer to the Attachments.
Page 5
1 Table of Contents - Attachments 1. Overview of Operating Results, Etc. .......................................................................................................... 2 (1) Overview of Operating Results for the Fiscal Year under Review ......................................................... 2 (2) Overview of Financial Position for the Fiscal Year under Review ......................................................... 3 (3) Overview of Cash Flows for the Fiscal Year under Review ................................................................... 3 (4) Future Outlook ....................................................................................................................................... 4 2. Basic Policy on Selection of Accounting Standards ................................................................................... 4 3. Consolidated Financial Statements and Principal Notes ............................................................................ 5 (1) Consolidated Balance Sheet ................................................................................................................... 5 (2) Consolidated Profit and Loss Account and Consolidated Statements of Comprehensive Income ......... 7 Consolidated Profit and Loss Account ................................................................................................... 7 Consolidated Statements of Comprehensive Income ............................................................................. 8 (3) Statement of Fluctuations in Consolidated Shareholders’ Equity ........................................................... 9 (4) Consolidated Cash Flow Statement ..................................................................................................... 11 (5) Notes to Consolidated Financial Statements ........................................................................................ 13 (Notes on going concern assumption) ............................................................................................. 13 (Changes in accounting policies) ..................................................................................................... 13 (Segment information, etc.) ............................................................................................................ 13 (Per share information) ................................................................................................................... 18 (Significant subsequent events) ....................................................................................................... 18 4. Other ........................................................................................................................................................ 19 (1) Changes in Officers ............................................................................................................................. 19
Page 6
2 1. Overview of Operating Results, Etc. (1) Overview of Operating Results for the Fiscal Year under Review During the fiscal year under review, the Japanese economy was on track of moderate recovery, although some areas remained stagnant. Looking ahead, the economy is expected to continue its gradual recovery, backed by improvements in the employment and income environment and the effects of various policies. However, the impact that continued price hikes have exerted on personal consumption through a downturn in consumer confidence and other factors, and the effects of U.S. trade and other policy trends have led to the risk of downward pressure on the Japanese economy. Furthermore, sufficient care will be requ ired with regard to the effects of fluctuations in financial and capital markets and other factors. With regard to the business environment surrounding the CTI Group, in the Domestic Business, the fiscal 2025 national budget for public works for disaster prevention/mitigation and national land resilience remained at the same level as in the previous fisc al year . Accordingly, the promotion of disaster prevention/mitigation measures such as river basin flood control and climate change adaption as well as of measures against aging infrastructure such as river and road maintenance projects continued. In the Overseas Business, the market environment surrounding CTI Engineering International Co., Ltd. deteriorated due to ODA budget contraction. In the UK, which is overseen by Waterman Group Plc, the impact of the situations in Ukraine and the Middle East caused high inflation to persist, and this led to a weakening in private works. In addition, the fiscal policy combining tax increases and spending cuts, which continued after the change of government, resulted in a slowdown in the progress of public works. Within this business environment, the Group formulated its Mid-Term Management Plan 2027 with the aim of achieving sustainable enhancement of corporate value. In FY2025 (63rd term), the initial year of the plan, the Group set forth the following priority agenda items: 1) Business Portfolio Transformation (a. Deepening of Core Businesses; b. Acceleration of Growth Areas; c. Exploration of New Bu sinesses; and d. Overseas Business Development); and 2) Rebuild of Foundation for Growth (a. Strengthening Investme nt in Human Capital; b. DX/Production System Reform; c. Challenges for Sustainability; and d. Strengthening Group Governance), and implemented numerous initiatives. As a result of these efforts, Orders Received by the Group during the fiscal year under review increased by 16.2% YoY to 109,701 million yen. Meanwhile, Sales increased by 3.4% YoY to 101,038 million yen. Ordinary Profit decreased by 1.9% YoY to 9,350 million yen, and Net Income Attributable to Owners of the Parent decreased by 11.8% YoY to 5,952 million yen. Results by reportable segment of the Group were as follows. 1. Domestic consulting engineering business Based on favorable conditions for order intake due to the Five-Year Road Program for disaster prevention, disaster mitigation, and building national resilience, which the Japanese government has been promoting, the Group pursued business portfolio transformation. As a result, orders from local governments increased, and targets for orders received in the all three businesses designated as growth areas (energy, information provision service, and CM/PM) were met. Sales were also in line with the target. Profit s were affected by the rise in selling, general and administrative expenses . Accordingly, orders received for the domestic consulting engineering business increased by 10.2% YoY to 72,411 million yen, sales increased by 4.2% YoY to 69,724 million yen, and segment income was 8,611 million yen, the same level as the previous year. 2. Overseas consulting engineering business Waterman Group Plc, which operates mainly in the UK, was affected by inflation and the impact of fiscal policy following the change of government , but sales and profit were both in line with targets. CTI Engineering International Co., Ltd. based in Southeast Asia received orders for large-scale projects for which the contracts had been delayed, and the target for orders received was met. However, s ales and profit were affected by lower capacity utilization due to contract delays. Accordingly, orders received for the overseas consulting engineering business increased by 30.0% YoY to 37,290 million yen, sales increased by 1.9% YoY to 31,313 million yen, and segment income decreased by 29.7% YoY to 543 million yen.
Page 7
3 (2) Overview of Financial Position for the Fiscal Year under Review (Assets) At the end of the fiscal year under review, the Group’s total assets totaled 96,344 million yen, an increase of 9.9% compared to the end of the previous fiscal year. This was mainly due to increases in “right-of-use assets” and “net defined benefit asset,” in addition to “notes receivable, completed work receivables and contract assets.” (Liabilities) Total liabilities at the end of the fiscal year under review were 29,529 million yen, an increase of 13.5% compared to the end of the previous fiscal year. This was mainly due to increases in “accrued income taxes,” “deferred tax liabilities,” and “asset retirement obligations,” in addition to “lease obligations,” while “short-term borrowings” decreased. (Net assets) Net assets at the end of the fiscal year under review totaled 66,815 million yen, an increase of 8.3% compared to the end of the previous fiscal year. This was mainly due to an increase in “profit surplus” resulting from the posting of “net income attributable to owners of the parent.” (3) Overview of Cash Flows for the Fiscal Year under Review At the end of the fiscal year under review, cash and cash equivalents (funds) increased by 423 million yen YoY to 15,093 million yen. Net cash provided by operating activities was 5,768 million yen, a YoY increase of 139.3%. This was mainly due to proceeds from “net income before income tax” of 9,000 million yen and “depreciation and amortization” of 1,855 million yen, which was partially offset by an “increase in trade receivables and contract assets” of 3,631 million yen and “payment of corporation income tax, etc.” of 2,330 million yen. Net cash used for investment activities was 612 million yen, a YoY decrease of 89.2%. This was mainly due to “payments for acquisition of tangible fixed assets” of 1,164 million yen. Net cash used for financial activities was 5,092 million yen, a YoY increase of 141.2%. This was mainly due to “dividend payments” of 2,083 million yen and “acquisition of treasury stock” of 1,540 million yen. (Reference) Indicators related to cash flows Indicator Fiscal year ended December 31, 2022 Fiscal year ended December 31, 2023 Fiscal year ended December 31, 2024 Fiscal year ended December 31, 2025 Net worth ratio (%) 64.8 68.7 70.1 69.1 Net worth ratio based on fair value (%) 61.9 91.3 77.9 85.1 Ratio of interest- bearing debt to cash flows (years) 0.4 1.5 0.9 0.3 Interest coverage ratio (times) 70.2 15.8 33.2 55.7 (Note) Each indicator was calculated as follows: Net worth ratio: Net worth / Total assets Net worth ratio based on fair value: Total market value of shares / Total assets Total market value of shares was calculated by multiplying the year-end share price (closing price) by the total number of issued and outstanding shares (less treasury shares) at the end of the period. Ratio of interest-bearing debt to cash flows: Interest-bearing debt / Cash flows from operating activities Interest-bearing debt includes all liabilities recorded on the Consolidated Balance Sheet for which interest is paid. Interest coverage ratio: Cash flows from operating activities / Interest paid Interest paid is the amount of “interest payment” recorded in the Consolidated Cash Flow Statement.
Page 8
4 (4) Future Outlook The Company’s medium-to long-term strategy In the domestic consulting engineering business, the First Medium-Term National Resilience Implementation Plan, which covers the five -year period from fiscal 2026 to fiscal 2030, was approved by the Cabinet in June 2026. The fiscal 2026 national budget for public works for disaster prevention/mitigation and national land resilience is expected to exceed the level of the previous fiscal year. Therefore, the promotion of disaster prevention/mitigation measures such as climate change adaption as well as of measures against aging infrastructure such as river and road maintenance projects is forecast to continue. In the overseas consulting engineering business, although the business in Southeast Asia overseen by CTI Engineering International Co., Ltd. is expected to grow steadily overall, the deterioration of market conditions due to intense competition is a concern. In the UK, where Waterman Group Plc oversees business, there are signs of a recovery in budget for public works, and inflation is moderating. However, interest rates have remained elevated, and the economic outlook is expected to remain unpredictable. Based on the review of the business plan for the fiscal year under review, the initial year of the Mid-Term Management Plan 2027, the Group has set the basic policy of the business plan for FY2026 (64th term) the second year of the Mid-Term Management Plan 2027, as follows. We aim to advance as a “Global Infrastructure Solution Group” that contributes to the sustainable development of society. 1) Acceleration of Business Portfolio Transformation We will further accelerate the Business Portfolio Transformation that made substantial progress in FY2025 and continue to expand our business. Specifically, we will work to enhance the competitiveness of core businesses, strengthen the foundations of growth areas, and accelerate growth in new business domains. 2) Increase the Employee Engagement Ranking Achieve both reduced workloads and qualitative growth ,Strengthen strategic communication and Enhance human resource development 3) Improve productivity through quality and production system reforms Strengthen profitability by improving productivity through technical excellence, enhanced PM, and operational efficiency and Integrate AI as a core tool into daily technical and administrative operations to achieve both process innovation and quality improvement 4) Strengthen group governance for both offensive and defensive perspectives Strengthen internal control and monitoring systems, Develop an organisational structure to maximize group synergies, Enhance monitoring of SG&A expenses and Establish investment discipline for domestic and international projects based on the cost of capital For the fiscal year ending December 31, 202 6, the Company forecasts orders received of 105,000 million yen, an increase of 4.3% YoY, sales of 105,000 million yen, operating income of 10,500 million yen, ordinary profit of 10,500 million yen, and net income attributable to owners of the parent of 7,000 million yen. 2. Basic Policy on Selection of Accounting Standards The Group prepares its consolidated financial statements in accordance with Generally Accepted Accounting Principles in Japan (JGAAP), taking into account comparability of consolidated financial statements between different accounting periods and companies. Concerning future adoption of the International Financial Reporting Standards (IFRS), the Group intends to take appropriate response with due consideration to various circumstances in Japan and overseas.
Page 9
5 3. Consolidated Financial Statements and Principal Notes (1) Consolidated Balance Sheet (million yen) Previous Consolidated Fiscal Year (as of December 31, 2024) Current Consolidated Fiscal Year (as of December 31, 2025) Assets Current assets Cash and bank deposits 15,523 15,988 Notes receivable, completed work receivables and contract assets 40,053 44,144 Prepaid expenses for uncompleted services 97 155 Other 1,809 2,830 Allowance for doubtful accounts -516 -600 Total current assets 56,967 62,519 Fixed assets Tangible fixed assets Buildings and structures 7,542 8,360 Accumulated depreciation -4,360 -4,550 Buildings and structures, net 3,181 3,809 Machinery and transportation equipment 1,344 1,419 Accumulated depreciation -1,075 -1,135 Machinery and transportation equipment, net 268 284 Land 4,903 4,601 Lease assets 493 755 Accumulated depreciation -275 -279 Lease assets, net 217 475 Right-of-use assets 3,699 5,885 Accumulated depreciation -2,084 -2,562 Right-of-use assets, net 1,614 3,322 Construction in progress 24 30 Other 3,887 4,040 Accumulated depreciation -2,919 -3,014 Other, net 967 1,025 Total tangible fixed assets 11,178 13,549 Intangible fixed assets Lease assets 9 36 Goodwill 6,874 6,607 Other 363 331 Total intangible fixed assets 7,246 6,974 Investments and other assets Investment securities 5,029 4,540 Long-term loans receivable from subsidiaries and affiliates 711 807 Deferred tax assets 222 202 Net defined benefit asset 4,468 5,813 Other 2,000 2,069 Allowance for doubtful accounts -131 -133 Total investments and other assets 12,301 13,300 Total fixed assets 30,726 33,825 Total assets 87,694 96,344
Page 10
6 (million yen) Previous Consolidated Fiscal Year (as of December 31, 2024) Current Consolidated Fiscal Year (as of December 31, 2025) Liabilities Current liabilities Accounts payable 3,609 3,545 Short-term borrowings 1,990 1,380 Lease obligations 780 950 Accrued income taxes 1,144 1,823 Contract liabilities 4,048 4,169 Reserve for bonuses 3,490 3,042 Reserve for bonuses to directors 219 213 Allowance for losses in operations 90 121 Other 6,958 7,465 Total current liabilities 22,333 22,712 Fixed liabilities Long-term borrowings 119 78 Lease obligations 1,137 3,054 Provision for warranties for completed operation 452 543 Deferred tax liabilities 169 786 Net defined benefit liability 898 914 Provision for loss on guarantees 27 142 Asset retirement obligations 302 849 Other 577 447 Total fixed liabilities 3,686 6,816 Total liabilities 26,019 29,529 Net assets Shareholders’ equity Capital 3,025 3,025 Capital surplus 3,650 3,830 Profit surplus 49,318 53,188 Treasury stock -890 -1,478 Total shareholders’ equity 55,104 58,566 Accumulated other comprehensive income Other valuation difference on available-for-sale securities 1,781 1,841 Foreign currency translation adjustment 2,549 3,199 Remeasurements of defined benefit plans 2,017 2,921 Total accumulated other comprehensive income 6,348 7,962 Non-controlling interests 221 285 Total net assets 61,674 66,815 Total liabilities and net assets 87,694 96,344
Page 11
7 (2) Consolidated Profit and Loss Account and Consolidated Statements of Comprehensive Income Consolidated Profit and Loss Account (million yen) Previous Consolidated Fiscal Year (from January 1, 2024 to December 31, 2024) Current Consolidated Fiscal Year (from January 1, 2025 to December 31, 2025) Sales 97,678 101,038 Cost of sales 69,251 71,457 Gross profit 28,427 29,580 Selling, general and administrative expenses 19,030 20,444 Operating income 9,396 9,136 Non-operating revenues Interest earned 76 100 Dividend earned 126 133 Insurance dividend earned 29 41 House rent earned 38 39 Other 46 121 Total non-operating revenues 317 436 Non-operating expenses Interest expense 72 103 Commission paid 16 3 Loss on investments in investment partnerships 27 30 Foreign exchange losses 58 37 Provision of allowance for doubtful accounts on loans and other receivables - 27 Commission for acquisition of treasury stock - 4 Other 4 14 Total non-operating expenses 178 221 Ordinary profit 9,535 9,350 Extraordinary gain Gain on sale of non-current assets 2 0 Gain on sale of investment securities 46 615 Gain on liquidation of subsidiaries and associates 9 - Total extraordinary gain 58 615 Extraordinary loss Loss from fixed assets disposal 63 32 Impairment losses - 432 Loss on liquidation of subsidiaries and associates - 88 Unrealized loss on investment securities - 219 Provision for loss on guarantees 27 142 Allowance for doubtful accounts 11 - Other - 50 Total extraordinary loss 103 965 Net income before income tax 9,489 9,000 Corporation tax, inhabitants taxes and enterprise tax 2,436 2,899 Deferred income taxes etc. 267 94 Total income taxes 2,704 2,994 Net income 6,785 6,006 Net income attributable to non-controlling interests 39 54 Net income attributable to owners of the parent 6,746 5,952
Page 12
8 Consolidated Statements of Comprehensive Income (million yen) Previous Consolidated Fiscal Year (from January 1, 2024 to December 31, 2024) Current Consolidated Fiscal Year (from January 1, 2025 to December 31, 2025) Net income 6,785 6,006 Other comprehensive income Other valuation difference on available-for-sale securities 267 60 Foreign currency translation adjustment 950 669 Remeasurements of defined benefit plans, net of tax 591 903 Total other comprehensive income 1,809 1,633 Comprehensive income 8,595 7,639 (Comprehensive income attributable to) Comprehensive income attributable to owners of the parent 8,562 7,566 Comprehensive income attributable to non-controlling interests 33 73
Page 13
9 (3) Statement of Fluctuations in Consolidated Shareholders’ Equity Previous Consolidated Fiscal Year (from January 1, 2024 to December 31, 2024) (million yen) Shareholders’ equity Capital Capital surplus Profit surplus Treasury stock Total shareholders’ equity Balance at the beginning of current period 3,025 3,616 44,652 -939 50,354 Changes of items during the period Dividends from surplus -2,079 -2,079 Net income attributable to owners of the parent 6,746 6,746 Acquisition of treasury stock -2 -2 Disposal of treasury stock 25 52 77 Changes in liabilities for written put options over non-controlling interests 8 8 Fluctuations during this fiscal year for items other than shareholders’ equity (Net amount) Total changes of items during the period - 33 4,666 49 4,749 Balance at the end of current period 3,025 3,650 49,318 -890 55,104 Accumulated other comprehensive income Non- controlling interests Total net assets Other valuation difference on available-for- sale securities Foreign currency translation adjustment Remeasurements of defined benefit plans Total accumulated other comprehensive income Balance at the beginning of current period 1,513 1,593 1,425 4,532 206 55,093 Changes of items during the period Dividends from surplus -2,079 Net income attributable to owners of the parent 6,746 Acquisition of treasury stock -2 Disposal of treasury stock 77 Changes in liabilities for written put options over non-controlling interests 8 Fluctuations during this fiscal year for items other than shareholders’ equity (Net amount) 267 956 591 1,815 14 1,830 Total changes of items during the period 267 956 591 1,815 14 6,580 Balance at the end of current period 1,781 2,549 2,017 6,348 221 61,674
Page 14
10 Current Consolidated Fiscal Year (from January 1, 2025 to December 31, 2025) (million yen) Shareholders’ equity Capital Capital surplus Profit surplus Treasury stock Total shareholders’ equity Balance at the beginning of current period 3,025 3,650 49,318 -890 55,104 Changes of items during the period Dividends from surplus -2,082 -2,082 Net income attributable to owners of the parent 5,952 5,952 Acquisition of treasury stock -637 -637 Disposal of treasury stock 24 49 74 Changes in liabilities for written put options over non-controlling interests 155 155 Fluctuations during this fiscal year for items other than shareholders’ equity (Net amount) Total changes of items during the period - 179 3,869 -588 3,461 Balance at the end of current period 3,025 3,830 53,188 -1,478 58,566 Accumulated other comprehensive income Non- controlling interests Total net assets Other valuation difference on available-for- sale securities Foreign currency translation adjustment Remeasurements of defined benefit plans Total accumulated other comprehensive income Balance at the beginning of current period 1,781 2,549 2,017 6,348 221 61,674 Changes of items during the period Dividends from surplus -2,082 Net income attributable to owners of the parent 5,952 Acquisition of treasury stock -637 Disposal of treasury stock 74 Changes in liabilities for written put options over non-controlling interests 155 Fluctuations during this fiscal year for items other than shareholders’ equity (Net amount) 60 650 903 1,614 64 1,678 Total changes of items during the period 60 650 903 1,614 64 5,140 Balance at the end of current period 1,841 3,199 2,921 7,962 285 66,815
Page 15
11 (4) Consolidated Cash Flow Statement (million yen) Previous Consolidated Fiscal Year (from January 1, 2024 to December 31, 2024) Current Consolidated Fiscal Year (from January 1, 2025 to December 31, 2025) Cash flow from operating activities Net income before income tax 9,489 9,000 Depreciation and amortization 1,609 1,855 Amortization of goodwill 338 513 Increase (decrease) in allowance for doubtful accounts -153 50 Increase (decrease) in net defined benefit liability -52 -44 Decrease (increase) in net defined benefit asset -509 74 Increase (decrease) in reserve for bonuses -495 -460 Increase (decrease) in reserve for bonuses to directors -72 -16 Increase (decrease) in allowance for losses in operations -47 26 Increase (decrease) in provision for loss on guarantees 27 114 Increase (decrease) in provision for warranties for completed operation -0 58 Interest and dividend earned -202 -234 Interest payable 72 103 Foreign exchange loss (gain) -51 -40 Commission for acquisition of treasury stock - 4 Unrealized loss on investment securities - 269 Loss (gain) on sale of investment securities -46 -615 Loss (gain) on liquidation of subsidiaries and associates -9 - Loss (gain) from fixed assets disposal 61 32 Impairment losses - 432 Decrease (increase) in trade receivables and contract assets -4,822 -3,631 Decrease (increase) in prepaid expenses for uncompleted services 10 -57 Decrease (increase) in other current assets 36 -30 Increase (decrease) in account payable 338 -74 Increase (decrease) in contract liabilities 85 -3 Increase (decrease) in accrued consumption taxes -494 256 Increase (decrease) in other current liabilities -503 219 Other 29 167 Subtotal 4,639 7,969 Received interest and dividend 201 232 Interest payment -72 -103 Payment of corporation income tax etc. -2,357 -2,330 Cash flow provided by operating activities 2,410 5,768
Page 16
12 (million yen) Previous Consolidated Fiscal Year (from January 1, 2024 to December 31, 2024) Current Consolidated Fiscal Year (from January 1, 2025 to December 31, 2025) Cash flow from investment activities Payments for acquisition of tangible fixed assets -850 -1,164 Proceeds from sale of property, plant and equipment 2 0 Payments for acquisition of intangible fixed assets -102 -134 Payments for acquisition of investment securities -225 -4 Proceeds from sales of investment securities 94 994 Repayments for loans -389 -450 Income from loan collection 209 218 Payments for investments in capital -75 -75 Purchase of shares of subsidiaries resulting in change in scope of consolidation -4,167 - Payments into time deposits -26 -894 Proceeds from withdrawal of time deposits - 852 Proceeds from liquidation of associates 67 0 Other payments -205 -41 Other proceeds 10 87 Cash flow used for investment activities -5,658 -612 Cash flow from financial activities Net increase (decrease) in short-term borrowings 800 -610 Repayments of long-term borrowings -40 -40 Acquisition of treasury stock -2 -642 Decrease (increase) in deposits paid for acquisition of treasury stock - -897 Repayments of lease obligations -727 -802 Dividend payments -2,072 -2,083 Dividends paid to non-controlling interests -18 -8 Purchase of shares in subsidiaries not resulting in change in scope of consolidation -50 -7 Cash flow used for financial activities -2,111 -5,092 Effect in fluctuation of exchange rate for cash and cash equivalents 374 359 Increase (decrease) in cash and cash equivalents -4,984 423 Opening balance of cash and cash equivalents 19,654 14,670 Closing balance of cash and cash equivalents 14,670 15,093
Page 17
13 (5) Notes to Consolidated Financial Statements (Notes on going concern assumption) Not applicable. (Changes in accounting policies) (Application of Accounting Standard for Corporate Tax, Inhabitant Tax and Enterprise Tax, etc.) The “Accounting Standard for Corporate Tax, Inhabitant Tax and Enterprise Tax, etc.” (ASBJ Statement No. 27, October 28, 2022, hereinafter referred to as the “Revised Accounting Standard 2022”) has been applied from the beginning of the fiscal year under review. With respect to the revision regarding the classification of income taxes (taxation on other comprehensive income), the transitional treatment stipulated in the proviso of paragraph 20 -3 of the Revised Accounting Standard for 2022 and the “Guidance on Accounting Standard for Tax Effect Accounting” (ASBJ Guidance No. 28, October 28, 2022, hereinafter referred to as the “Guidance on the Revised 2022 Accounting Standard”) have been applied. The “Guidance on Accounting Standard for Tax Effect Accounting” (ASBJ Guidance No. 28, October 28, 2022; hereinafter referred to as the “2022 Revised Guidance”) The transitional treatment prescribed in the proviso of paragraph 65 -2 (2) of the “Guidance on Accounting Standard for Tax Effect Accounting” (ASBJ Guidance No.28, O ctober 28, 2022) is followed. This change has no impact on the consolidated financial statements. In addition, the Company has applied the 2022 Revised Guidance on Accounting Standard for Taxation of Sales of Subsidiaries’ Stock, etc. between Consolidated Companies, effective as of the beginning of the fiscal year under review . The change in accounting policy has been applied retrospectively, and the consolidated financial statements for the previous fiscal year have been prepared on a retrospective basis. There is no effect of this change on the consolidated financial statements for the previous fiscal year. (Segment information, etc.) [Segment Information] 1. Outline of reportable segments The reportable segments of the Group are defined as operating segments within the Group whose discrete financial information is available and is reviewed by the Board of Directors regularly in order to decide the allocation of management resources and assess results. The Group assesses results by each company constituting the Group, and the Group companies are classified into those that mainly engage in operations in Japan and those that mainly engage in operations overseas. Accordingly, the two reportable segments of the Group are “Domestic consulting engineering business” and “Overseas consulting engineering business.” 2. Method for computing the amounts of sales, profit (loss), assets and other items by reportable segment The accounting method for the reported business segments conforms to the accounting policies applied for preparation of the consolidated financial statements. Income by reportable segment is based on operating income. Inter -segment revenue and transfers are based on prevailing market prices. In the previous fiscal year, the Company added HIROKEN CONSULTANTS Co., Ltd. to the scope of consolidation and included it in the reportable segment of “Domestic consulting engineering business.”
Page 18
14 3. Information on the amounts of sales, profit (loss), assets and other items by reportable segment Previous Consolidated Fiscal Year (from January 1, 2024 to December 31, 2024) (million yen) Domestic consulting engineering business Overseas consulting engineering business Total Adjustments (Note 1) Book value on the consolidated financial statements (Note 2) Sales Sales to outside customers 66,945 30,733 97,678 – 97,678 Inter-segment sales or transfers 55 16 71 -71 – Total 67,000 30,749 97,750 -71 97,678 Segment income 8,610 773 9,383 13 9,396 Segment assets 65,634 23,446 89,080 -1,386 87,694 Other items Depreciation 844 765 1,609 – 1,609 Amortization of goodwill – 338 338 – 338 (Notes) 1. Adjustments to inter-segment sales or transfers (-71 million yen), adjustments to segment income (13 million yen), and adjustments to segment assets (-1,386 million yen) are attributable to inter-segment eliminations. 2. Segment income is reconciled with operating income in the Consolidated Profit and Loss Account. 3. As the deemed acquisition date of HIROKEN CONSULTANTS Co., Ltd., which was included in the scope of consolidation in the previous fiscal year, was set at the end of the previous fiscal year, the company’s financial results are not included in sales, segment income, and other items of the domestic consulting engineering business for the previous fiscal year. Current Consolidated Fiscal Year (from January 1, 2025 to December 31, 2025) (million yen) Domestic consulting engineering business Overseas consulting engineering business Total Adjustments (Note 1) Book value on the consolidated financial statements (Note 2) Sales Sales to outside customers 69,724 31,313 101,038 – 101,038 Inter-segment sales or transfers 50 18 68 -68 – Total 69,774 31,331 101,106 -68 101,038 Segment income 8,611 543 9,155 -18 9,136 Segment assets 71,966 27,427 99,394 -3,049 96,344 Other items Depreciation 922 933 1,855 – 1,855 Amortization of goodwill 168 345 513 – 513 (Notes) 1. Adjustments to inter-segment sales or transfers (-68 million yen), adjustments to segment income (- 18 million yen), and adjustments to segment assets ( -3,049 million yen) are attributable to inter - segment eliminations. 2. Segment income is reconciled with operating income in the Consolidated Profit and Loss Account.
Page 19
15 [Relevant Information] Previous Consolidated Fiscal Year (from January 1, 2024 to December 31, 2024) 1. Information by products and services The same information is disclosed in Segment Information, and is omitted here. 2. Information by areas (1) Sales (million yen) Japan Asia Europe Other Total UK Other than UK 67,042 4,156 22,362 1,986 2,129 97,678 (Notes) 1. Sales are classified based on areas in which the Group renders its services. 2. Method of classification of country or region, and major countries or regions that belong to each region 1) Method of classification of country or region: based on geographic proximity 2) Countries or regions that belong to classifications other than Japan Asia: Philippines, etc. Europe other than UK: Ireland, etc. Other: Australia, etc. (2) Tangible fixed assets (million yen) Japan Asia Europe Other Total UK Other than UK 9,245 5 1,643 93 190 11,178 (Notes) 1. Tangible fixed assets are classified based on the locations of the assets. 2. Method of classification of country or region, and major countries or regions that belong to each region 1) Method of classification of country or region: based on geographic proximity 2) Countries or regions that belong to classifications other than Japan Asia: Philippines, etc. Europe other than UK: Ireland, etc. Other: Australia, etc. 3. Information by major customer (million yen) Name of customer Sales Name of the relevant segment National government of Japan 32,052 Domestic consulting engineering business
Page 20
16 Current Consolidated Fiscal Year (from January 1, 2025 to December 31, 2025) 1. Information by products and services The same information is disclosed in Segment Information, and is omitted here. 2. Information by areas (1) Sales (million yen) Japan Asia Europe Other Total UK Other than UK 69,921 3,519 23,320 2,242 2,033 101,038 (Notes) 1. Sales are classified based on areas in which the Group renders its services. 2. Method of classification of country or region, and major countries or regions that belong to each region 1) Method of classification of country or region: based on geographic proximity 2) Countries or regions that belong to classifications other than Japan Asia: Philippines, etc. Europe other than UK: Ireland, etc. Other: Australia, etc. (2) Tangible fixed assets (million yen) Japan Asia Europe Other Total UK Other than UK 9,829 22 3,389 71 236 13,549 (Notes) 1. Tangible fixed assets are classified based on the locations of the assets. 2. Method of classification of country or region, and major countries or regions that belong to each region 1) Method of classification of country or region: based on geographic proximity 2) Countries or regions that belong to classifications other than Japan Asia: Philippines, etc. Europe other than UK: Ireland, etc. Other: Australia, etc. 3. Information by major customer (million yen) Name of customer Sales Name of the relevant segment National government of Japan 30,741 Domestic consulting engineering business
Page 21
17 [Impairment losses on fixed assets by reportable segment] Previous Consolidated Fiscal Year (from January 1, 2024 to December 31, 2024) Not applicable. Current Consolidated Fiscal Year (from January 1, 2025 to December 31, 2025) (million yen) Domestic consulting engineering business Overseas consulting engineering business Corporate/ elimination Total Impairment loss 432 – – 432 [Amortized amount and unamortized balance of goodwill by reportable segment] Previous Consolidated Fiscal Year (from January 1, 2024 to December 31, 2024) (million yen) Domestic consulting engineering business Overseas consulting engineering business Corporate/ elimination Total Amortization of goodwill in the current period – 338 – 338 Balance at the end of the current period 2,523 4,351 – 6,874 Current Consolidated Fiscal Year (from January 1, 2025 to December 31, 2025) (million yen) Domestic consulting engineering business Overseas consulting engineering business Corporate/ elimination Total Amortization of goodwill in the current period 168 345 – 513 Balance at the end of the current period 2,354 4,252 – 6,607 [Gain on negative goodwill by reportable segment] Previous Consolidated Fiscal Year (from January 1, 2024 to December 31, 2024) Not applicable. Current Consolidated Fiscal Year (from January 1, 2025 to December 31, 2025) Not applicable.
Page 22
18 (Per share information) Previous Consolidated Fiscal Year (from January 1, 2024 to December 31, 2024) Current Consolidated Fiscal Year (from January 1, 2025 to December 31, 2025) Net assets per share 2,213.71 yen 2,412.45 yen Net income per share 243.10 yen 214.45 yen (Notes) 1. Net income per share after adjustment of potential shares is not stated because the Company has issued no potential shares. 2. The Company has conducted a 2 -for-1 stock split of its common shares as of January 1, 2025. Net assets per share and net income per share were calculated on the premise that the stock split was conducted at the beginning of the previous fiscal year. 3. Basis of calculation of net income per share: Item Previous Consolidated Fiscal Year (from January 1, 2024 to December 31, 2024) Current Consolidated Fiscal Year (from January 1, 2025 to December 31, 2025) Net income attributable to owners of the parent (million yen) 6,746 5,952 Amounts not belonging to ordinary shareholders (million yen) – – Net income attributable to owners of the parent related to common shares (million yen) 6,746 5,952 Average number of common shares for the entire fiscal year (shares) 27,749,982 27,755,043 (Significant subsequent events) Not applicable.
Page 23
19 4. Other 1) New officers (As of March 27, 2026) Not applicable 2) Retired officers (As of March 27, 2026) Not applicable 3) Other changes in officers (including Executive Officers) (As of March 27, 2026) Name New position Current position Tetsumi Nakamura Director, Chairman Chief, Research Center for Sustainable Societies Representative Director, Chairman Chief, Research Center for Sustainable Societies Naoto Suzuki Representative Director, Senior Managing Executive Officer Chief, Planning & Business Development Headquarters Director, Senior Managing Executive Officer Chief, Planning & Business Development Headquarters Nobuyuki Wakabayashi Executive Officer Deputy Chief, Engineering Headquarters Deputy Chief, Engineering Headquarters Michiaki Iwata Executive Officer Deputy Managing Principal, Tokyo Main Office Assistant Managing Principal, Tokyo Main Office (Note)The changes of Tetsumi Nakamura and Naoto Suzuki have been disclosed as of December 23, 2025.