| 指標 | 当期 | 前年同期 | YoY |
|---|---|---|---|
| Revenue | ¥1656.2B | ¥1511.6B | +9.6% |
| Operating Income | ¥154.1B | ¥135.3B | +13.9% |
| Ordinary Income | ¥162.8B | ¥140.9B | +15.5% |
| Net Income | ¥114.4B | ¥81.6B | +40.3% |
| ROE | 10.1% | 7.4% | - |
For the full year ended March 2026, Revenue was ¥1656.2B (YoY +¥144.6B +9.6%), Operating Income was ¥154.1B (YoY +¥18.8B +13.9%), Ordinary Income was ¥162.8B (YoY +¥21.9B +15.5%), and Net Income was ¥114.4B (YoY +¥32.8B +40.3%), achieving year-on-year growth at all profit stages. Revenue growth was driven by strong progress in the Domestic Environment & Energy Business and a substantial expansion of the Package Boiler Business, resulting in near double-digit growth. Gross margin improved to 23.7% (prior year 22.3%) up +1.4pt, and Operating Margin rose to 9.3% (prior year 9.0%) up +0.3pt. The large increase in Net Income was supported not only by higher operating profits but also by an expanded gain on sales of investment securities of ¥38.3B (prior year ¥8.4B), leading to a substantial +40.3% increase at the bottom line. ROE recovered to 10.1% above the prior year level, Operating Cash Flow (OCF) recovered strongly to ¥246.6B (prior year -¥40.7B) due to working capital improvements. Free Cash Flow generated was ¥229.1B, providing ample coverage for dividends and share buybacks as shareholder returns.
【Revenue】Revenue of ¥1656.2B (YoY +9.6%) was led by the Domestic Environment & Energy Business at ¥1269.3B (+11.7%), accounting for 76.5% of total sales. The Package Boiler Business expanded sharply to ¥268.5B (+35.3%), driven by higher project volumes and operational improvements. Conversely, the Overseas Environment & Energy Business declined significantly to ¥36.4B (-34.5%) due to timing of projects and country risk. The Equipment & Systems Business decreased to ¥85.2B (-32.1%) as the prior year included large projects. On a consolidated basis, strong performance in the two domestic core segments absorbed the slowdown in overseas and equipment businesses, delivering overall revenue growth.
【Profitability】Gross profit was ¥392.7B (gross margin 23.7%), up ¥59.3B YoY, with gross margin improving +1.4pt. Lower cost ratios reflect favorable project mix and construction cost controls. SG&A was ¥238.6B (SG&A ratio 14.4%), up ¥36.9B YoY and SG&A ratio up +1.1pt, but gross margin improvement absorbed this, resulting in Operating Income of ¥154.1B (Operating margin 9.3%) up ¥18.8B. At the ordinary level, non-operating income was ¥11.2B (including dividends received ¥7.2B and interest received ¥1.4B) versus non-operating expenses ¥2.5B (including foreign exchange losses ¥3.0B), leading Ordinary Income to ¥162.8B (Ordinary Income margin 9.8%) up ¥21.9B. A special gain of ¥38.3B from sales of investment securities expanded Profit Before Tax to ¥201.1B (prior year ¥149.3B, +34.6%). After corporate taxes of ¥62.5B (effective tax rate 31.1%) and non-controlling interests of ¥1.2B, Net Income was ¥114.4B (Net margin 6.9%) up +40.3% YoY. In conclusion, revenue growth in core domestic businesses, improved gross margin, and expanded gains on sales of investment securities drove the year-on-year increases.
The Domestic Environment & Energy Business generated Operating Income of ¥156.2B (prior year ¥130.8B, +19.4%), with a margin of 12.3%, producing the majority of corporate profit. Sales and profit were both robust, supported by steady progress in municipal waste treatment plants and biomass power generation projects. The Package Boiler Business had Operating Income of ¥18.4B (prior year ¥13.9B, +32.3%), with a margin of 6.9%. Against sales growth of +35.3%, profit rose +32.3%, demonstrating operating leverage. The Equipment & Systems Business achieved Operating Income of ¥10.5B (prior year ¥8.9B, +17.8%) with a high margin of 12.3%; despite sales decline (-32.1%), profits increased, suggesting reduction of low-margin projects and a shift to higher value-added projects. The Overseas Environment & Energy Business recorded Operating Income of ¥1.0B (prior year ¥10.7B, -90.5%), with margin deteriorating sharply to 2.8%. Revenue decline and margin deterioration progressed concurrently, highlighting difficult order conditions and execution management challenges.
【収益性】Operating margin 9.3% (prior year 9.0%), Ordinary Income margin 9.8% (prior year 9.3%), Net margin 6.9% (prior year 5.4%) all improved across stages. ROE was 10.1%, up +1.4pt YoY, returning to double-digit territory. Gross margin 23.7% improved +1.4pt YoY, reflecting cost control. 【キャッシュ品質】Operating Cash Flow/Net Income was 2.16x, very strong. The accrual ratio (Net Income - Operating Cash Flow / Total Assets) was -6.9%, indicating low accruals and a cash-backed earnings profile. Operating Cash Flow/EBITDA (EBITDA = Operating Income + Depreciation ¥174.2B) was 1.42x, a high level showing strong cash conversion. 【投資効率】Total Asset Turnover was 0.87x (prior year 0.79x), indicating improved asset efficiency. CapEx ¥11.1B / Depreciation ¥20.1B ratio was 0.55x, showing a trend of restrained replacement investment. R&D spending was ¥14.0B (0.8% of Revenue), relatively low, leaving room to increase technology/product development investment. 【財務健全性】Equity Ratio improved to 59.6% (prior year 57.4%) up +2.2pt, indicating a solid financial base. Current ratio 205.5% and Quick ratio 203.9% show very healthy short-term liquidity. Debt/EBITDA was 0.05x (interest-bearing debt ¥8.6B / EBITDA ¥174.2B), extremely low, and interest coverage (Operating Cash Flow / Interest Paid) was 1,541x, effectively near net-debt-free. On working capital, DSO (days sales outstanding) was 72 days — reasonable for project-based business — but work-in-progress ¥33.1B accounted for 46.8% of inventories ¥70.6B, making project progress and acceptance timing key to cash efficiency.
Operating Cash Flow was ¥246.6B (prior year -¥40.7B), a large recovery and 2.16x of Net Income ¥114.4B, indicating high-quality earnings. Working capital movements included a decrease in trade receivables of ¥85.2B, a decrease in inventories of ¥53.3B, and an increase in contract liabilities (advance receipts), which boosted OCF, while a decrease in trade payables of ¥53.4B was a negative contribution. OCF subtotal (before working capital changes) was ¥272.2B, stably generated from Depreciation ¥20.1B and Profit ¥114.4B. Investing Cash Flow was -¥17.4B: CapEx -¥11.1B, intangible asset investment -¥2.1B, and net proceeds from sales of investment securities +¥46.3B (proceeds ¥49.1B - acquisitions ¥0.8B), resulting in a small net outflow for investing activities. Financing Cash Flow was -¥257.7B, driven by dividend payments ¥58.8B, share buybacks ¥78.8B, and net decrease in short-term borrowings ¥120.8B. Free Cash Flow (OCF + Investing CF) was ¥229.1B, ample to cover shareholder returns and reduce interest-bearing debt. Cash and cash equivalents at year-end were ¥353.5B (beginning ¥380.7B), down ¥27.3B, but substantial reduction in interest-bearing debt further strengthened the net cash position.
Operating Income of ¥154.1B reflects recurring business activities, supported by improved gross margin and steady progress in domestic core businesses, indicating structural earnings power. Non-operating items such as dividends received ¥7.2B and interest received ¥1.4B supplemented stable income and absorbed foreign exchange losses ¥3.0B. A special gain of ¥38.3B from sales of investment securities accounted for roughly 33% of this period's Net Income ¥114.4B, so when assessing sustainable earnings power, emphasis should be placed on operating and ordinary level profit growth. OCF ¥246.6B significantly exceeded Net Income ¥114.4B; working capital improvements (decline in trade receivables, decline in inventories, increase in contract liabilities) underpinned cash generation. Comprehensive income ¥175.2B exceeded Net Income ¥114.4B, with valuation differences on available-for-sale securities ¥27.3B and actuarial gains on retirement benefits ¥8.1B contributing positively, reflecting unrealized gains on the balance sheet and improved pension assets. The accrual ratio of -6.9% is low, indicating a high degree of cash realization of profits and limited risk of earnings manipulation.
The full-year forecast plans Revenue ¥1910.0B (YoY +15.3%), Operating Income ¥178.0B (YoY +15.5%), Ordinary Income ¥185.0B (YoY +13.6%), and EPS ¥215 (YoY +16.2%), expecting further double-digit revenue growth and high-single-digit to high-teens profit growth. The forecast Operating Income ¥178.0B represents an achievement rate of 86.6% against actual Operating Income ¥154.1B, assuming substantial buildup in H2. Revenue progress is 86.7% of full-year plan, requiring approximately ¥254B of incremental sales in H2 (about +¥109B YoY in H2). Achieving Operating Income target depends on maintaining/improving gross margin and controlling SG&A, and is contingent on domestic Environment & Energy project progress, increased Package Boiler volumes, and margin improvement in Overseas Environment & Energy. The special gain ¥38.3B is not assumed in the full-year forecast; given its one-off nature, growth in core earnings is essential to achieve Net Income and EPS targets. Dividend guidance is year-end ¥54 (interim ¥39, annual ¥93 equivalent); payout ratio against forecast EPS ¥215 is 43.3%, a sustainable level, indicating continued shareholder returns tied to performance.
Annual dividend is ¥93 (interim ¥39 actual + year-end ¥54 forecast), and payout ratio against EPS ¥185.04 is 50.3%. This represents a large increase from the prior year dividend of ¥28 (interim only), marking a policy shift to full-year dividends. Against Free Cash Flow ¥229.1B, total dividends ¥58.8B and dividends + share buybacks totaling ¥137.6B result in FCF coverage of 1.66x, indicating ample capacity. Share buybacks of ¥78.8B (per cash flow statement) were executed, reducing outstanding shares to 75.7 million shares (after deducting treasury stock 2.8 million shares, 73.2 million shares outstanding), down from prior year. Total Return Ratio (dividends + share buybacks / Net Income) is approximately 120%, and with ample cash and a strong balance sheet, shareholder returns have been intensified. Next fiscal year’s year-end dividend guidance ¥54 against forecast EPS ¥215 implies a payout ratio of approximately 25%, conservative, and disclosure of a full-year policy including the interim dividend is awaited. Cash on hand ¥403.2B, net cash ¥394.6B (cash - interest-bearing debt ¥8.6B) indicate very strong liquidity, supporting durability of dividends and buybacks.
Concentration risk in the Domestic Environment & Energy Business: With 76.5% of Revenue and the bulk of Operating Income generated by the Domestic Environment & Energy Business, timing of municipal budget execution, intensified bidding competition, and raw material/construction cost increases directly affect profitability. Although contract liabilities ¥161.1B and backlog provide some visibility, delays in large project progress or additional provisions for construction losses (¥7.6B recorded) could materially impact profit levels.
Working capital and project execution risk: Work-in-progress ¥33.1B accounts for 46.8% of inventories, and DSO 72 days reflects typical cash collection delays in project businesses. Contract assets (claims for progress billings) ¥471.8B rose ¥76.8B YoY, and mismatches in acceptance timing or customer-caused payment delays could increase OCF volatility. Product warranty provisions ¥4.3B (prior year ¥1.7B), roughly 2.5x increase, indicate risks of higher quality/after-sales costs.
Weakness in overseas operations and investment efficiency challenges: The Overseas Environment & Energy Business posted Revenue -34.5% and Operating Income -90.5%, exposing vulnerabilities to country risk, FX volatility, and local partner risk. CapEx/Depreciation ratio 0.55x and R&D/Revenue 0.8% indicate restrained renewal and technology investment, raising concerns about mid-to-long-term competitiveness and new business development. Intangible fixed assets increased to ¥14.0B (prior year ¥9.6B) but full-scale investment in digital/service domains has not yet been realized.
収益性・リターン
| 指標 | 自社 | 中央値 (IQR) | Delta |
|---|---|---|---|
| Operating Margin | 9.3% | 7.8% (4.6%–12.3%) | +1.6pt |
| Net Margin | 6.9% | 5.2% (2.3%–8.2%) | +1.7pt |
Both Operating Margin and Net Margin exceed the manufacturing industry medians, placing profitability toward the upper end within the sector.
成長性・資本効率
| 指標 | 自社 | 中央値 (IQR) | Delta |
|---|---|---|---|
| Revenue Growth Rate (YoY) | 9.6% | 3.7% (-0.4%–9.3%) | +5.9pt |
Revenue growth rate significantly exceeds the industry median, with expansion in Domestic Environment & Energy and Package Boiler achieving relatively high growth within manufacturing.
※Source: Company compilation
Stable growth in the Domestic Environment & Energy Business and rapid expansion of the Package Boiler Business drove consolidated performance; gross margin improvement +1.4pt and Operating Margin rising to 9.3% can be viewed as outcomes of improved project quality and cost management. Accumulation of contract liabilities ¥161.1B (YoY +75.9%) indicates backlog depth and provides short-term revenue visibility. Strong OCF ¥246.6B (2.16x Net Income) and Free Cash Flow ¥229.1B materially enhanced shareholder return capacity and financial flexibility.
As gain on sales of investment securities ¥38.3B accounted for about 33% of Net Income, next year should factor in the drop-off of one-off gains and focus on sustainable growth at the operating/EBITDA level. The full-year forecast of Revenue +15.3% and Operating Income +15.5% is optimistic but assumes an H2 build of approximately ¥24B in Operating Income, contingent on smooth progress of domestic projects and margin improvement in Overseas Environment & Energy. On working capital, WIP ratio 46.8% and DSO 72 days indicate potential delays in cash conversion; smooth project management and acceptance processes are key to CF stability.
With CapEx/Depreciation 0.55x and R&D/Revenue 0.8%, renewal and technology investment remain restrained, suggesting scope to increase investment to maintain mid-to-long-term competitiveness and nurture new businesses. The severe deterioration in Overseas Environment & Energy (Revenue -34.5%, Operating Income -90.5%) exposed vulnerabilities to country risk and FX, highlighting the need to review overseas strategy and progress in restoring profitability as a focus for the next term.
This report is an earnings analysis document automatically generated by AI analyzing XBRL financial statement data. It does not constitute a recommendation to invest in any particular security. Industry benchmarks are reference information compiled by our firm based on public financial statements. Investment decisions are your responsibility; consult professional advisors as necessary before making investment decisions.
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