TOKYO (Reuters) - Sekisui House Ltd (1928.T), Japan’s largest home builder, is likely to lift its annual profit forecast on robust demand for eco-friendly and quake-proof houses following the March earthquake and tsunami, the company’s chief executive said.
Reconstruction-related demand will help push the nation’s annual housing starts above 900,000 units, or 20 percent above pre-quake levels for the next few years, Chief Executive Isami Wada told the Reuters Rebuilding Japan Summit on Wednesday.
“Strong housing demand, in general, is likely to last another 2-3 years across Japan,” he said, adding that a revised outlook would likely come when it reports midyear results.
“Demand for houses with their own power generation systems is also likely to grow,” he said, after the March 11 disaster totally or partially damaged some 450,000 houses and shut down nuclear power plants, causing power shortages.
In March before the earthquake, Sekisui forecast it would make an operating profit of 63 billion yen ($785 million) for the financial year to January 31, up 12 percent from the previous year. The forecast matches the market consensus.
That means Sekisui is well on its way to achieving its midterm target of a 68 billion yen profit by January 2013 by selling more eco-friendly houses and expanding overseas, where the Osaka-based company had little presence until two years ago.
Wada, who had just returned from a business trip to Shanghai the previous day, said Sekisui’s push to expand abroad means overseas revenues will likely surpass its domestic revenue in 15 to 20 years.
“We are targeting countries with high populations and economic growth,” said Wada, without disclosing which projects he has in the pipeline.
But the 70-year-old CEO did say that his firm is keen to join a $5.3 billion waterfront development project in Sydney being led by Australia’s Lend Lease (LLC.AX) if there is an opportunity.
Sekisui first stepped outside its home market in 2009 when it forged a residential property business alliance with the Australian real estate giant.
Sekisui, which competes with domestic rivals such as Daiwa House Industry Co (1925.T), has also kicked off residential property developments in the United States and Singapore, and last month launched a subsidiary in China’s Suzhou city.
($1 = 80.270 Japanese Yen)
Reporting by Mariko Katsumura; Editing by Chris Gallagher