I would like to begin this message by expressing my sincere appreciation to our shareholders and investors for their ongoing support.
The environment surrounding the Company is changing constantly, reflecting the COVID-19 pandemic, growing globalization and the diversification of values. Although overall construction investment has been solid on a nominal value basis, the construction industry faces a situation that deserves continuing attention, partly due to effects of surges in construction materials, among other factors.
Under such business climate, the Company has been approaching management with an emphasis on capital cost and the share price.
Under the Medium-term Management Plan 2023 announced in May 2021, the Company has already implemented dividends based on a dividend payout ratio of 70% and a large-scale treasury share buyback and is now conducting financial leverage-oriented management. The Company's stock price, however, indicates a price book-value ratio (PBR) of slightly below 1. To improve the PBR, we believe that it is essential to improve by stages the profit ratio of the domestic construction business and overseas civil engineering work, based on the profitability improvement plan included in Medium-term Management Plan 2025 announced in February 2023, and to achieve profitability of capital exceeding capital cost, while working to maintain and improve the price earnings ratio (PER).
Moreover, the Company established a Sustainability Committee in April 2023 and has been pursuing initiatives to achieve sustainability-oriented management. Going forward, it will further strengthen the provision of information regarding sustainability, aiming to achieve a higher share price mainly through an improvement in its ESG rating and selection as an ESG stock.
The Company will also take steps to enhance information disclosure to investors, by disclosing the path to future growth of the AssetValue-added Business (the former Urban Development & Real Estate Business ) and the Regional Environmental Solutions Business (the former Environment and Energy Business), as well as the results of cross-industry partnerships, including with ITOCHU Corporation.
The Company aims to achieve a PBR of 1 in the future through these initiatives.
We ask all our shareholders and investors for their continued guidance and encouragement

June 28, 2023
Yuichi Kono
Representative Director and Executive Vice President