| Metric | This Period | Prior Year | YoY |
|---|---|---|---|
| Revenue | ¥1009.0B | ¥971.0B | +3.9% |
| Operating Income | ¥65.3B | ¥57.0B | +14.5% |
| Ordinary Income | ¥65.7B | ¥53.9B | +21.9% |
| Net Income | ¥20.7B | ¥41.4B | -50.0% |
| ROE | 3.0% | 6.5% | - |
For the fiscal year ended March 2026, Revenue was ¥1,009B (vs. prior year +¥38B, +3.9%), Operating Income was ¥65.3B (vs. prior year +¥8.3B, +14.5%), Ordinary Income was ¥65.7B (vs. prior year +¥11.8B, +21.9%), and Net Income attributable to owners of the parent was ¥20.7B (vs. prior year -¥20.7B, -50.0%). At the operating level, the Domestic Measurement & Control Business grew +6.5% and maintained a gross margin of 24.0% (prior year 24.1%) while keeping SG&A largely flat, resulting in an improvement in operating margin to 6.5% (prior year 5.9%, +0.6pt). Ordinary Income outpaced operating profit growth due to a decrease in non-operating expenses (interest expense -¥0.31B, foreign exchange loss -¥2.86B). Net Income declined due to the swing from prior-year special gains and higher tax burden despite recording Special Income of ¥68.4B including gain on sale of fixed assets of ¥61.5B (prior year Special Income ¥13.7B). Operating Cash Flow was ¥88.6B (vs. prior year +28.6%) supported by inventory reduction, and Free Cash Flow was ¥136.9B, boosted by proceeds from sale of fixed assets.
[Revenue] Revenue reached ¥1,009B (vs. prior year +3.9%). By segment, Domestic Measurement & Control Business accounted for ¥597.3B (+6.5%), representing 59.2% of total, with progress in deliveries of smart meters and energy solution products contributing. Overseas Measurement & Control Business was ¥415.7B (-0.4%), slightly down, with a recorded foreign exchange loss of ¥1.4B suggesting price competition and FX impacts in international markets. Real Estate Business contracted to ¥4.3B (-22.5%), with limited impact on the overall portfolio. Cost of sales was ¥766.8B yielding a gross margin of 24.0%, down 0.1pt from 24.1% a year earlier, while SG&A was ¥176.9B (17.5% of sales), an absolute reduction from ¥177.4B, allowing revenue growth to leverage operating profit.
[Profit & Loss] Operating Income was ¥65.3B (+14.5%), improving operating margin to 6.5% (prior year 5.9%, +0.6pt). By segment, Domestic Measurement & Control delivered ¥46.8B (+17.9%, margin 7.8%) as the core driver; Overseas Measurement & Control posted ¥17.4B (+18.0%, margin 4.2%, up from 3.5% prior year); Real Estate produced ¥1.0B (-61.9%) and declined. Ordinary Income was ¥65.7B (+21.9%), outpacing operating income growth due to reduced non-operating expenses (interest paid ¥3.2B vs. prior year ¥3.5B; foreign exchange loss ¥1.4B vs. prior year ¥4.8B). Pre-tax profit was ¥107.9B (prior year ¥63.9B), substantially increased by Special Income of ¥68.4B (gain on sale of fixed assets ¥61.5B; gain on sale of investment securities ¥6.9B). Even after deducting Special Losses of ¥26.2B (including ¥20.6B of business structural reform costs), one-off factors materially contributed. Corporate taxes were ¥40.8B (effective tax rate 37.8%), doubling from prior year ¥20.8B. After subtracting Net Income attributable to non-controlling interests of ¥9.4B, Net Income attributable to owners of the parent was ¥20.7B (-50.0%), reflecting the reversal of prior-year one-off gains and higher tax burden. In summary, revenue and profitability improved at the operating and ordinary levels, but Net Income declined due to one-off factor volatility.
Domestic Measurement & Control Business: Revenue ¥597.3B (+6.5%), Operating Income ¥46.8B (+17.9%), margin improved to 7.8% (prior year 7.1%, +0.7pt). Demand for smart meter upgrades and deliveries of distribution boards contributed, and SG&A efficiency aided margin expansion. Overseas Measurement & Control Business: Revenue ¥415.7B (-0.4%), Operating Income ¥17.4B (+18.0%), margin improved to 4.2% (prior year 3.5%, +0.7pt). Revenue was roughly flat due to FX effects, but manufacturing cost improvements and stronger expense control enhanced profitability. Real Estate Business: Revenue ¥4.3B (-22.5%), Operating Income ¥1.0B (-61.9%), margin declined to 23.7% (prior year 48.1%). Partial disposals of rental properties and deteriorating profitability likely impacted results. Overall, margins improved domestically and internationally, confirming stronger core earnings power.
[Profitability] Operating margin 6.5% (prior year 5.9%, +0.6pt), Net margin 2.1% (prior year 4.3%, -2.2pt), ROE 3.0% (prior year 6.9%). Operating-level performance improved but Net Income declined due to one-off items. Gross margin 24.0% (prior year 24.1%, slight -0.1pt). SG&A ratio improved to 17.5% (prior year 18.3%, -0.8pt), enabling operating leverage. [Cash Quality] Operating CF / Net Income = 4.28x, very high; inventory compression ¥45.0B and corporate tax payments ¥24.5B considered, cash generation is strong. Operating CF / EBITDA (EBITDA = Operating Income ¥65.3B + Depreciation ¥30.2B = ¥95.5B) = 0.93x, indicating healthy conversion. [Investment Efficiency] Capital expenditure ¥47.6B / Depreciation ¥30.2B = 1.58x, indicating ongoing renewal and growth investment; intangible assets increased to ¥12.6B (prior year ¥9.1B, +39.0%), suggesting digitalization efforts. [Financial Soundness] Equity Ratio 69.0% (prior year 63.0%), Current Ratio 249% (prior year 204%), Quick Ratio 209% (prior year 159%) — high levels showing excellent short-term payment capacity. Interest-bearing debt consists only of short-term borrowings ¥4.65B (prior year ¥69.3B), effectively debt-free; Debt/EBITDA = 0.05x, Cash ¥159.2B / Short-term borrowings ¥4.65B = 34.2x, indicating minimal liquidity risk.
Operating CF was ¥88.6B (prior year ¥68.9B, +28.6%), with pre-tax profit of ¥107.9B adjusted by depreciation ¥30.2B and decrease in inventories ¥45.0B as main items. Inventory compression suggests normalization of supply and improved delivery progress, but trade receivables increased by ¥17.3B and trade payables decreased by ¥12.4B, partially reversing working capital. Corporate tax payments increased to ¥24.5B (prior year ¥15.7B), reducing the operating CF subtotal of ¥112.7B, yet overall Operating CF/Net Income remained 4.28x indicating high quality. Investing CF was positive ¥48.3B (prior year -¥12.3B) as proceeds from sale of fixed assets ¥89.1B (mainly real estate disposals) far exceeded capital expenditures ¥47.6B. Strategic investments continued including intangible asset investment ¥6.6B. Financing CF was -¥58.3B (prior year -¥30.3B), mainly due to repayment of short-term borrowings ¥32.4B, dividends ¥13.0B, and share buybacks ¥10.3B. As a result, Free Cash Flow (Operating CF + Investing CF) was a significant positive ¥136.9B, and year-end cash rose to ¥159.2B (prior year ¥115.5B, +37.8%). Cash generation capacity is very strong, providing ample room for shareholder returns and growth investment.
Operating Income of ¥65.3B vs. Net Income ¥20.7B indicates solid core earnings, but Special Income of ¥68.4B (gain on sale of fixed assets ¥61.5B, gain on sale of investment securities ¥6.9B) substantially boosted pre-tax profit. Special Losses totaled ¥26.2B (including ¥20.6B business structural reform costs and loss on disposal of fixed assets ¥0.9B), so net one-off items amounted to +¥42.2B. Non-operating income ¥6.1B (including dividend income ¥3.0B) and non-operating expenses ¥5.7B (interest expense ¥3.2B, foreign exchange loss ¥1.4B) roughly balanced, indicating limited impact from non-operating items at the ordinary income level. Comprehensive income was ¥78.5B (¥69.1B attributable to owners of the parent), well above Net Income ¥20.7B, aided by valuation differences on available-for-sale securities ¥7.9B and actuarial gains/losses adjustments ¥3.1B. Operating CF ¥88.6B / Net Income ¥20.7B = 4.28x, and the operating CF subtotal was ¥112.7B; the divergence from profit is mainly due to inventory compression and timing of tax payments, with an accrual ratio of -4.6% indicating soundness. Ordinary Income ¥65.7B appears sustainable from core business, but most of this period’s Net Income depends on one-off items; next fiscal year should be evaluated assuming Special Income declines.
For FY2027 ending March 2027, the company forecasts Revenue ¥1,010B (vs. prior year +0.1%), Operating Income ¥81B (+24.1%), Ordinary Income ¥81B (+23.3%), Net Income attributable to owners of the parent ¥48B (+131.9%), EPS ¥108, and dividend ¥29 (including a special interim dividend ¥10). Revenue is effectively flat, but Operating Margin is expected to improve to 8.0% (this period 6.5%, +1.5pt). Net Income guidance of ¥48B assumes the decline of this period’s one-off gains and is projected as a build-up on core earnings, representing a conservative stance. At H1 the company had already achieved Operating Income ¥65.3B (80.6% of full-year forecast ¥81B) and Ordinary Income ¥65.7B (81.1% of forecast), indicating high progress and suggesting that some cost increases may be assumed in H2. Payout Ratio based on forecast EPS is 26.9%, within sustainable range; with cash ¥159.2B and FCF generation capacity, dividend capacity is ample. FX assumptions are not disclosed, but given the limited FX loss ¥1.4B this period, sensitivity is presumed low.
Annual dividend is ¥49 (year-end ¥32 + interim ¥17), including a special year-end dividend of ¥10. Based on weighted average shares outstanding of 44,712 thousand shares, total dividends amount to approximately ¥2.3B, representing a Payout Ratio of 29.1%, a sustainable level. Share buybacks of ¥10.3B were executed, bringing total shareholder returns to about ¥3.3B. The Total Return Ratio (dividend + buybacks) on EPS ¥129.22 is approximately 57%, while relative to Free Cash Flow ¥136.9B it is 24.1%, leaving ample room. Forecast dividend for FY2027 is ¥29 (including interim special dividend ¥10), with forecast EPS ¥107.99 implying a Payout Ratio of 26.9%, set conservatively. With cash ¥159.2B, Operating CF ¥88.6B, and effectively net cash balance, dividend sustainability is high. Future dividend increases depend on stable FCF generation and accumulation of core profits, but shareholder return policy is assessed as prudent.
Dependence on public investment cycles: The Domestic Measurement & Control Business accounts for 59.2% of Revenue, and demand for smart meter updates is linked to electric utilities’ investment plans. Risks include timing mismatches in orders and intensified price competition that could affect Revenue and margins. A large increase in product warranty provision to ¥14.0B (prior year ¥3.7B, +278%) suggests rising quality control costs and potential margin pressure.
Working capital efficiency weakness: Trade receivables ¥193.1B (DSO approximately 70 days) and inventories ¥94.1B signify large working capital and a long CCC (cash conversion cycle) of about 123 days. Inventory compression of ¥45.0B contributed to this period’s Operating CF, but if production and orders increase next period causing inventories to rise again, Operating CF could decline and liquidity variability could widen.
Dependence on one-off gains: This period’s Net Income ¥20.7B included net Special Income of ¥42.2B (approximately twice Net Income), so while Ordinary Income ¥65.7B is sustainable, Net Income was heavily reliant on one-off factors. Next period, Net Income is expected to revert closer to core levels as Special Income declines; monitor EPS and dividend funding volatility. Deferred tax liabilities increased by ¥30.3B related to unrealized gains on securities and may indicate volatility in comprehensive income and net assets with market fluctuations.
Profitability & Returns
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Operating Margin | 6.5% | 7.8% (4.6%–12.3%) | -1.3pt |
| Net Margin | 2.1% | 5.2% (2.3%–8.2%) | -3.1pt |
Operating margin is 1.3pt below the industry median, and Net margin is 3.1pt below. The primary cause is the downward impact of one-off items on Net Income; on an Ordinary Income basis the company appears in line with the industry.
Growth & Capital Efficiency
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Revenue Growth Rate (YoY) | 3.9% | 3.7% (-0.4%–9.3%) | +0.2pt |
Revenue growth slightly exceeds the industry median by 0.2pt, in line with manufacturing sector trends.
※ Source: Company compilation
Trend of improving core profitability: Operating Margin improved to 6.5% (prior year 5.9%, +0.6pt) with margin increases across domestic and overseas segments. Lower SG&A ratio and maintained gross margin enabled operating leverage, making the FY2027 guidance Operating Margin of 8.0% (+1.5pt) plausible. Smart meter replacement demand and expansion of energy solutions are medium-term tailwinds.
Balance between financial soundness and capital efficiency: Effectively debt-free (Interest-bearing debt ¥4.65B), Equity Ratio 69.0%, Current Ratio 249% — very healthy financials — but ROE is low at 3.0%. With cash ¥159.2B and FCF ¥136.9B, there is scope to improve capital efficiency via increased growth investment or shareholder returns. Structural improvement in working capital efficiency (CCC 123 days, DSO 70 days) is key to enhancing cash generation over the medium term.
Impact of one-off items and conservatism of guidance: Net Income ¥20.7B was significantly aided by net Special Income ¥42.2B, and the FY2027 forecast of ¥48B assumes a reversion of one-off gains and is conservatively designed around core earnings. The high progress toward full-year guidance at H1 suggests potential incorporation of H2 cost increases or investments. Dividend ¥29 (including special ¥10) and shareholder return policy are prudent, with FCF coverage around 6x indicating strong sustainability.
This report was auto-generated by AI analyzing XBRL financial statement data. It does not constitute a recommendation to invest in any specific security. Industry benchmarks are reference information compiled by our firm from publicly available financial statements. Investment decisions should be made at your own responsibility, and, where appropriate, after consulting a professional advisor.