| Metric | Current Period | Prior Year Period | YoY |
|---|---|---|---|
| Revenue / Net Sales | ¥2448.4B | ¥2434.8B | +0.6% |
| Operating Income / Operating Profit | ¥187.0B | ¥168.4B | +11.0% |
| Equity-method Investment Income (Loss) | ¥1.6B | ¥0.9B | +78.9% |
| Ordinary Income | ¥191.5B | ¥173.7B | +10.3% |
| Net Income / Net Profit | ¥48.5B | ¥39.8B | +22.0% |
| ROE | 4.6% | 4.2% | - |
For the FY2026 (Apr 2025 - Mar 2026) results, Revenue was ¥2,448.4B (YoY +¥13.6B +0.6%), Operating Income was ¥187.0B (YoY +¥18.6B +11.0%), Ordinary Income was ¥191.5B (YoY +¥17.8B +10.3%), and Net Income was ¥48.5B (YoY +¥8.8B +22.0%). While revenue showed only a slight increase, operating income achieved double-digit growth and the operating margin rose to 7.6% (up +0.7pt from 6.9% a year earlier). Net income rose substantially by 22.0% despite the recognition of special losses of ¥29.1B, supported by improved profitability at the operating level.
[Revenue] Revenue totaled ¥2,448.4B (+0.6%), a modest increase. By segment, Energy recorded ¥1,031.7B (-2.7%) and was the largest but declined; however, Information & Communications ¥672.0B (+4.2%), CATV ¥376.4B (+2.3%), Construction Equipment & Real Estate ¥281.1B (+0.7%), and Aqua ¥104.0B (+3.5%) each grew and underpinned the overall result. Energy declined due to price factors and sales volume, but growth in other segments secured a slight increase at the company level.
[Profitability] Operating Income was ¥187.0B (+11.0%), achieving double-digit growth. Gross margin improved to 39.5% (up +1.0pt from 38.5% a year earlier), while SG&A ratio worsened slightly to 31.8% (up +0.2pt from 31.6%), and gross margin improvement outpaced SG&A increases, lifting operating margin to 7.6% (up +0.7pt from 6.9%). By segment, CATV delivered ¥61.3B (+10.1%, margin 16.3%) maintaining high margins; Information & Communications grew sharply to ¥44.1B (+24.1%); Energy achieved ¥69.8B (+4.9%)—profit increased despite revenue decline through cost control. Ordinary Income was ¥191.5B (+10.3%); non-operating items contributed a small positive ¥4.5B (including equity-method investment income ¥1.6B and dividend income ¥4.5B), while non-operating expenses were ¥6.9B centered on interest expense ¥5.3B, yielding a net positive contribution. Special items comprised special income ¥1.5B versus special losses ¥29.1B (primarily impairment losses ¥12.9B and loss on retirement of fixed assets ¥15.8B), resulting in profit before tax of ¥164.0B (+9.9%). After deducting income taxes of ¥54.8B (effective tax rate 33.4%) and non-controlling interests of ¥1.6B, profit attributable to owners of parent before accounting adjustments was ¥107.5B (+16.6%), and accounting net income was ¥48.5B (+22.0%), a substantial increase. In conclusion, despite only slight revenue growth, improvements in operating profitability drove both top-line and bottom-line increases.
Energy: Revenue ¥1,031.7B (-2.7%), Operating Income ¥69.8B (+4.9%), margin 6.8%. Profit increased via cost controls despite revenue decline. Information & Communications: Revenue ¥672.0B (+4.2%), Operating Income ¥44.1B (+24.1%), margin 6.6%; wins in orders and improved project mix contributed. CATV: Revenue ¥376.4B (+2.3%), Operating Income ¥61.3B (+10.1%), margin 16.3%, maintaining the highest margin among segments and demonstrating a stable earnings base. Construction Equipment & Real Estate: Revenue ¥281.1B (+0.7%), Operating Income ¥16.6B (+20.3%), margin 5.9%. Aqua: Revenue ¥104.0B (+3.5%), Operating Income ¥3.5B (-22.0%), margin 3.4%—profit declined but scale is small. Others: Revenue ¥59.8B (+6.6%), Operating Income ¥2.1B (substantial improvement from ¥0.4B a year earlier). Overall, CATV and Information & Communications’ higher profitability contributed to the improvement in consolidated margins.
[Profitability] Operating margin 7.6% (up +0.7pt from 6.9%), Net margin 2.0% (up +0.4pt from 1.6%), indicating continued margin improvement at the operating level. ROE 4.6% rose slightly versus the prior period, but the increase in equity (+9.0%) expanded the denominator despite higher net income.
[Cash Quality] Operating Cash Flow (OCF) ¥272.1B is 5.6x the net income ¥48.5B, indicating high cash quality, supported by non-cash charges including depreciation ¥167.4B. OCF/Revenue ratio is a solid 11.1%. Working capital changes were a net negative of ¥21.2B (inventory increase ¥7.3B, trade receivables decrease ¥11.3B, accounts payable decrease ¥25.2B), modestly compressing OCF from the subtotal ¥326.9B. Free Cash Flow was ¥103.3B (OCF ¥272.1B - Investing CF ¥168.8B), sufficiently covering dividends (approx. ¥44.9B) and share buybacks of ¥20.0B in aggregate.
[Investment Efficiency] Total asset turnover was 1.12x (Revenue ¥2,448.4B / average total assets ¥2,189.5B), slightly lower year-on-year. Investment securities increased to ¥203.6B (from ¥162.7B, +25.1%), contributing to asset accumulation. Goodwill was ¥45.1B (from ¥61.4B, -26.6%), with amortization ¥9.8B and impairment-related adjustments progressing.
[Financial Soundness] Equity Ratio 47.6% (up +2.2pt from 45.4%), with shareholders’ equity accumulating to ¥1,044.6B (from ¥958.5B, +9.0%). Current ratio 90.3% (Current assets ¥553.5B / Current liabilities ¥612.6B) is below 1.0x and short-term liquidity is tightened, but interest-bearing debt including long-term borrowings ¥306.4B and short-term borrowings ¥172.0B is supported by OCF ¥272.1B and interest coverage of 35.2x (Operating Income ¥187.0B / Interest expense ¥5.3B), indicating solid ability to service debt. Cash and deposits ¥54.1B (from ¥56.4B, -4.1%) mean on-hand liquidity is tight, but stable OCF generation limits funding risk.
OCF was ¥272.1B (from ¥257.7B, +5.6%), reflecting the level after deducting income taxes paid ¥54.8B from the OCF subtotal ¥326.9B. Non-cash charges such as depreciation ¥167.4B and goodwill amortization ¥9.8B supported cash generation, resulting in a cash conversion ratio of 5.6x relative to net income ¥48.5B. Working capital changes were a modest negative contribution of ¥21.2B (inventory increase ¥7.3B, trade receivables decrease ¥11.3B reflecting collection progress, accounts payable decrease ¥25.2B). Investing CF was -¥168.8B, driven mainly by capital expenditures and intangible investments of ¥170.5B. Free Cash Flow was positive ¥103.3B, comfortably covering dividend payments ¥44.9B and share buybacks ¥20.0B (FCF coverage 1.59x). Financing CF was -¥105.9B, with issuance of long-term borrowings ¥100.0B offset by long-term borrowings repayments ¥115.9B, net increase in short-term borrowings ¥33.3B, lease liabilities repayments ¥53.4B, dividends ¥44.5B, and share buybacks ¥20.0B. Ending cash and deposits were ¥54.1B (from ¥56.4B, down ¥2.5B), leaving on-hand liquidity tight but managed through stable OCF generation.
Operating Income ¥187.0B vs Ordinary Income ¥191.5B indicates non-operating items contributed a small positive ¥4.5B. Non-operating income was ¥11.4B (including dividend income ¥4.5B and equity-method investment income ¥1.6B), contributing as recurring income sources. Special losses totaled ¥29.1B (impairment losses ¥12.9B, loss on retirement of fixed assets ¥15.8B), causing profit before tax of ¥164.0B to be ¥27.5B below ordinary income. These special losses are largely one-off in nature and are expected to drop out next fiscal year. Comprehensive income ¥150.1B far exceeded net income ¥48.5B; other comprehensive income totaled +¥101.6B (securities valuation difference ¥27.6B, deferred hedge P&L -¥11.4B, retirement benefit adjustments ¥13.2B, etc.), providing a large positive contribution. Most of comprehensive income derives from valuation items, so assessing cash earnings quality on a net income basis is appropriate. With OCF at 5.6x net income, cash backing for profits is very strong and accrual-based earnings quality is high.
Full-year guidance: Revenue ¥2,600.0B (YoY +6.2%), Operating Income ¥190.0B (YoY +1.6%), Ordinary Income ¥192.0B (YoY +0.2%), Net Income ¥110.0B (EPS equivalent ¥84.53). Actuals achieved Revenue ¥2,448.4B (progress 94.2%), Operating Income ¥187.0B (progress 98.4%), Ordinary Income ¥191.5B (progress 99.7%), and profit attributable to owners of parent ¥107.5B (EPS equivalent ¥82.53, progress 97.7%), landing broadly in line with guidance. The company has left its forecast unchanged and full-year targets are expected to be met. Dividend guidance is annual ¥36.00 (interim ¥17, year-end forecast ¥19), consistent with an implied payout ratio of 48.2% on an actuals basis. Performance progress is steady and the need for forecast revisions is judged to be low.
Annual dividend is ¥36 (interim ¥17, year-end ¥19), with payout ratio 48.2% (total dividends ¥44.9B / profit attributable to owners of parent ¥107.5B). Prior year dividend was ¥34 (interim ¥17, year-end ¥17; payout ratio 48.2%). This fiscal year the company increased the year-end dividend by ¥2, resulting in a total increase. The company executed share buybacks of ¥20.0B during the period; combined with dividends ¥44.9B, total shareholder returns amount to approx. ¥64.9B, implying a Total Return Ratio of approx. 60.4% relative to profit attributable to owners of parent ¥107.5B. Free Cash Flow ¥103.3B exceeded total returns, and both dividends and buybacks were sufficiently financed from cash generation (FCF coverage 1.59x). Retained earnings rose to ¥538.4B (from ¥475.5B, +13.2%), supporting dividend capacity. Considering non-cash charges such as goodwill amortization ¥9.8B, distributable capacity is effectively larger, supporting expectations for continued stable dividends and flexible shareholder returns.
Short-term liquidity risk: Current ratio 90.3%, cash and deposits ¥54.1B versus short-term borrowings ¥172.0B, with current liabilities ¥612.6B exceeding current assets ¥553.5B. On-hand liquidity is tight and ongoing refinancing of short-term debt and stable OCF generation are required. Interest coverage is a healthy 35.2x, but rising interest rate environments could increase funding costs.
Occurrence of special losses: This fiscal year special losses totaled ¥28.7B (loss on retirement of fixed assets ¥15.8B, impairment losses ¥12.9B), impacting approximately 27% of net income. Impairments were distributed across Information & Communications ¥3.4B, Construction Equipment & Real Estate ¥3.9B, and Others ¥5.6B. Goodwill balance ¥45.1B (from ¥61.4B, -26.6%) has been reduced, but future impairment risk requires continued monitoring.
Segment-specific earnings volatility: Energy saw revenue decline (-2.7%) affected by prices and volumes; Aqua posted operating income down -22.0%. CATV maintains high margins (16.3%) but depends on subscriber dynamics, and Information & Communications may see margin fluctuations from changes in project mix. While the diversified portfolio provides resilience to economic cycles, changes in market conditions and competition in each segment could affect performance.
Profitability & Returns
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Operating Margin | 7.6% | 3.4% (1.4%–5.0%) | +4.3pt |
| Net Margin | 2.0% | 2.3% (1.0%–4.6%) | -0.3pt |
Operating margin outperforms the industry median of 3.4% by +4.3pt, placing the company in the upper rankings for profitability within the peer group. Net margin is slightly below the median of 2.3%, but excluding special losses it aligns with industry levels.
Growth & Capital Efficiency
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Revenue Growth (YoY) | 0.6% | 5.9% (0.4%–10.7%) | -5.3pt |
Revenue growth trails the industry median of 5.9% by -5.3pt, with Energy revenue decline being the main factor; accelerating top-line growth remains a key challenge.
※Source: Company aggregation
Operating-level margin improvement continues; operating margin 7.6% (up +0.7pt from 6.9%) significantly exceeds the industry median of 3.4%. CATV’s high margins (16.3%) and Information & Communications’ profit growth (+24.1%) drove consolidated earnings, enabling operating profit growth even with Energy revenue decline—this structure is noteworthy.
Free Cash Flow ¥103.3B sufficiently covered dividends and buybacks (FCF coverage 1.59x), and OCF was 5.6x net income, demonstrating strong cash generation. Although current ratio 90.3% indicates tightened short-term liquidity, stable OCF and diversified reliance on long-term borrowings help manage funding risk.
Special losses ¥29.1B (impairment & retirements) are largely one-off and expected to drop out next fiscal year. Goodwill balance was reduced to ¥45.1B, lowering impairment risk relatively. The earnings forecast is expected to be met, and dividend payout ratio 48.2% and Total Return Ratio 60.4% indicate disciplined shareholder returns.
This report was automatically generated by AI analyzing XBRL financial statement data. It is not a recommendation to invest in any specific security. Industry benchmarks are reference information compiled by our company based on public financial statements. Investment decisions are your responsibility; consult a professional advisor as needed.