| Metric | Current Period | Prior Year Same Period | YoY |
|---|---|---|---|
| Revenue / Net Sales | ¥40566.4B | ¥43371.1B | -6.5% |
| Operating Income / Operating Profit | ¥4375.6B | ¥4688.8B | -6.7% |
| Ordinary Income | ¥5185.3B | ¥5316.9B | -2.5% |
| Net Income / Net Profit | ¥2400.9B | ¥3143.4B | -23.6% |
| ROE | 6.9% | 10.1% | - |
For the fiscal year ended March 2026, results were down: Revenue ¥4兆566B (YoY -¥2,805B, -6.5%), Operating Income ¥4,376B (YoY -¥313B, -6.7%), Ordinary Income ¥5,185B (YoY -¥132B, -2.5%), and Net Income attributable to owners of the parent ¥2,401B (YoY -¥743B, -23.6%). Top-line contracted due to normalization of power sales prices and fuel cost adjustment effects. The decline in operating-stage profitability was contained at -6.7%, roughly in line with the revenue decline, while at the ordinary income level non-operating income — foreign exchange gains ¥437B and equity-method investment income ¥337B — supported results and limited the decline to -2.5%. At the net income level, special gains ¥614B (gain on sale of subsidiary shares) were recorded, but the removal of prior-period non-recurring factors led to a -23.6% decline. Operating Cash Flow was ¥6,524B (YoY +13.4%), substantially exceeding net income; free cash flow was ¥805B, sufficient to nearly cover total dividends of approximately ¥669B.
[Revenue] Revenue was ¥4兆566B (-6.5%). Segment composition: Energy Business ¥3兆2,614B (external sales, 80.4% share), Transmission & Distribution Business ¥3,862B (9.5%), Information & Communications Business ¥2,222B (5.5%), Lifestyle & Business Solutions Business ¥1,868B (4.6%). The core Energy Business likely saw revenue decline due to lower electricity sales unit prices, normalization of the fuel cost adjustment mechanism, and intensified competition. Information & Communications and Lifestyle & Business Solutions, as non-regulated areas, provide growth potential and contribute to revenue diversification.
[Profitability] Operating Income was ¥4,376B (-6.7%); operating margin held at 10.8%, roughly unchanged from the prior year. The comparable decline rates in revenue and operating income suggest a balance between reduced fixed-cost absorption and cuts in variable costs. Ordinary Income was ¥5,185B (-2.5%), showing a smaller decline than at the operating level. Major non-operating income of ¥1,632B consisted of foreign exchange gains ¥437B, equity-method investment income ¥337B, and dividend income ¥253B, which offset operating-stage profit declines. Non-operating expenses totaled ¥822B, including interest expense ¥427B, and interest burden has trended higher year-on-year. Special gains of ¥614B (gain on sale of subsidiary shares) were recorded; pre-tax income was ¥5,204B (-12.5%), and after deducting income taxes of ¥1,367B and non-controlling interests of ¥36B, net income attributable to owners of the parent was ¥2,401B (-23.6%). The prior year included non-recurring items that boosted net income to ¥3,143B, so the current period shows a larger decline due to normalization. In summary: revenue and operating-stage results declined, ordinary-stage decline was limited by non-operating income contributions, and net income decline widened due to the drop-off of prior-period non-recurring factors.
The Energy Business reported segment revenue ¥3兆4,668B, segment profit ¥3,774B, and a segment profit margin of 10.9%, serving as the company’s profit driver. Equity-method investment income ¥337B was fully allocated to the Energy Business, reflecting contributions from upstream resources and overseas investments. The Transmission & Distribution Business reported revenue ¥1兆577B, profit ¥631B, and margin 6.0% — stable as a regulated business but with relatively low profitability. The Information & Communications Business had revenue ¥3,187B, profit ¥471B, and margin 14.8%, above the company average, with expansion of digital-related services lifting group margins. The Lifestyle & Business Solutions Business reported revenue ¥2,233B, profit ¥390B, and margin 17.5%, the highest-margin segment, reflecting added value from real estate and lifestyle services. Margin ranking by segment is Lifestyle & Business Solutions (17.5%) > Information & Communications (14.8%) > Energy (10.9%) > Transmission & Distribution (6.0%). By revenue composition, the Energy Business accounts for roughly 68% (including inter-segment transactions), indicating high dependence, but growth in high-margin non-energy businesses contributes to overall revenue stability.
[Profitability] The operating margin of 10.8% was maintained at prior-year levels, and net margin of 5.9% (parent attributable) exceeds the industry median of 5.6%, a favorable level. ROE of 6.9% is calculated from parent attributable profit ¥2,401B against equity attributable to owners of the parent ¥3兆503B, indicating steady capital efficiency historically. ROA (on an ordinary income basis) of 5.3% is evaluated as ordinary income ¥5,185B against total assets ¥9兆8,547B. [Cash Quality] Operating Cash Flow ¥6,524B equals 2.72x consolidated net income ¥2,401B, indicating strong cash backing of earnings. Operating CF subtotal (before changes in working capital) was ¥7,837B, from which corporate tax payments ¥1,416B etc. were deducted to arrive at ¥6,524B. EBITDA ¥7,759B (Operating Income ¥4,376B + Depreciation & Amortization ¥3,383B) produced an OCF/EBITDA ratio of 84.1%, slightly below the benchmark (>90%), with inventory increase ¥463B and accounts payable decrease ¥219B temporarily pressuring working capital. [Investment Efficiency] Capital expenditures (tangible and intangible) totaled ¥5,807B, well above depreciation ¥3,383B, reflecting active investment in T&D network maintenance/renewal, IT infrastructure strengthening, and non-energy business expansion. Free Cash Flow ¥805B remains sufficient to almost cover total dividends ¥669B (interim ¥30 and year-end ¥45 for an annual ¥75 × 1.1B shares). [Balance Sheet Soundness] Equity Ratio 35.5%, Debt-to-Equity 1.81x, Debt/EBITDA 3.0x (interest-bearing debt ¥2兆3,354B ÷ EBITDA ¥7,759B) — within typical leverage for a power utility. Interest coverage of 10.25x (EBIT ¥4,376B ÷ interest expense ¥427B) indicates strong capacity to service interest. Current ratio 101.7% and quick ratio 82.7% indicate tight short-term liquidity, but cash and deposits ¥7,374B are 4.76x short-term borrowings ¥1,550B, providing sufficient short-term repayment capacity.
Operating Cash Flow was ¥6,524B (YoY +¥949B, +13.4%), reflecting adjustments from Operating CF subtotal ¥7,837B for changes in working capital and corporate tax payments. On working capital, a decrease in accounts receivable contributed inflows of ¥568B, while inventory increase ¥464B and accounts payable decrease ¥219B absorbed cash, leaving an overall working capital outflow trend. Interest and dividend received totaled ¥514B versus interest paid ¥411B, keeping net financial cash inflow positive, though interest paid has increased year-on-year reflecting changing interest rate conditions. Investing CF was -¥5,719B, a large cash outflow driven mainly by acquisition of tangible and intangible fixed assets ¥5,605B. After sale proceeds ¥456B, net investment includes both maintenance/renewal and growth investments, with capex notably exceeding depreciation. Financing CF was -¥2,902B: financing inflows included long-term borrowings ¥1,928B and bond issuance ¥1,668B, while outflows comprised long-term borrowings repayments ¥3,385B, bond redemptions ¥2,300B, and dividend payments ¥669B. Net short-term borrowings were roughly flat. Free Cash Flow ¥805B is the sum of Operating CF ¥6,524B and Investing CF -¥5,719B; coverage of total dividends ¥669B is 1.20x, maintaining self-sufficiency. Cash and cash equivalents fell from ¥9,414B at the beginning of the period to ¥7,413B at period-end, a decrease of ¥2,001B, but liquidity remains ample.
Ordinary Income ¥5,185B comprises Operating Income ¥4,376B plus non-operating income ¥1,632B minus non-operating expenses ¥822B. Major non-operating income items were foreign exchange gains ¥437B, equity-method investment income ¥337B, and dividend income ¥253B. The foreign exchange gains ¥437B are largely one-off in nature due to exchange rate movements and have limited repeatability. Equity-method investment income ¥337B suggests sustained earnings contributions from overseas resource and energy investments but depends on commodity markets and investee performance. Dividend income ¥253B can be regarded as stable income from equity investments. Special gains ¥614B (gain on sale of subsidiary shares) are non-recurring and not part of recurring earnings power. The drop from ordinary income to net income reflects income taxes ¥1,367B and non-controlling interests ¥36B, yielding an effective tax rate of about 26%, within normal range. Operating CF ¥6,524B comfortably exceeds net income ¥2,401B; the accrual ratio (Net Income - Operating CF) / Total Assets is -4.2%, negative, indicating high quality of earnings. Total comprehensive income ¥4,609B exceeded net income ¥2,401B by ¥2,208B; other comprehensive income ¥773B mainly consisted of valuation differences on available-for-sale securities ¥491B, foreign currency translation adjustments ¥65B, actuarial gains/losses related to retirement benefits ¥96B, and OCI attributable to equity-method investees ¥160B, with mark-to-market improvements contributing to the quality of equity.
Full-year guidance projects Revenue ¥4.5兆 (YoY +10.9%), Operating Income ¥2,500B (YoY -42.9%), Ordinary Income ¥2,900B (YoY -44.1%), and EPS ¥278.26. While revenue is forecast to increase, operating and ordinary stages are expected to see significant declines. The guidance appears conservative, incorporating the removal of this period’s foreign exchange gains and other one-offs, normalization of the fuel cost adjustment mechanism, intensified retail power competition, and higher interest burden. Operating margin is expected to decline to 5.6% (¥2,500B ÷ ¥4.5兆), a compression of approximately 5.2 percentage points from 10.8% this period, reflecting the reversal of non-recurring upside factors. Dividend guidance is ¥40 (interim + year-end combined), down from ¥75 this period, indicating a cut and signaling a reassessment of dividend policy in a reduced-profit environment. Progress rates were not disclosed, but assuming current results represent approximately nine months of performance relative to the full-year plan, the second-half revenue environment is expected to be further challenged.
Dividends for the period were interim ¥30 and year-end ¥45 for an annual ¥75, implying total dividends of approximately ¥669B against roughly 1.115B shares outstanding. The payout ratio relative to net income attributable to owners of the parent ¥2,401B is about 27.9%, a conservative level that retains over 70% of earnings for reinvestment. Free Cash Flow ¥805B covers total dividends ¥669B at 1.20x, indicating dividends are fundable from operating cash flow. Dividend yield cannot be calculated without share price data, but the low payout ratio suggests room for dividend increases. Share buybacks were immaterial during the period (acquisitions ¥57M, disposals ¥58M), so dividend remains the main channel of shareholder return. Total shareholder return ratio is roughly 28%, similar to the payout ratio, reflecting a conservative return stance given leverage (Debt/EBITDA 3.0x) and investment needs. Next-period dividend guidance of ¥40 (down from ¥75) constitutes a cut, but given the decline in expected profits (Operating Income -42.9%), it appears designed to preserve a stable minimum dividend. Retained earnings are substantial at ¥2兆2,415B, providing ample capacity to maintain dividends through temporary earnings downturns.
Revenue concentration in the Energy Business: The Energy Business accounts for 68.4% of segment revenue (including inter-segment transactions), creating a structure in which fuel price volatility, electricity sales price market fluctuations, and intensified competition leading to customer attrition directly affect corporate performance. The current period’s -6.5% revenue decline indicates that continued normalization in the Energy Business may maintain revenue pressure going forward.
Foreign exchange and interest-rate risk: This period’s foreign exchange gains ¥437B accounted for 8.4% of Ordinary Income ¥5,185B, showing that exchange rate movements can materially affect profits. The next-period guidance projects Ordinary Income ¥2,900B (-44.1%), suggesting the loss of FX gains as a principal driver. Interest expense has risen to ¥427B (YoY +¥92B, +27.4%), and in a rising-rate environment interest payments on interest-bearing debt ¥2兆3,354B could increase further.
Working capital management risk: With current ratio 101.7% and quick ratio 82.7%, short-term liquidity is tight; inventory increase ¥464B and accounts payable decrease ¥219B pressured operating cash flow, driving the OCF/EBITDA ratio down to 84.1% below the benchmark. If working capital movements are temporary, risks are limited, but persistent increases in fuel inventory or changes to payment terms could weaken cash generation and tighten short-term liquidity.
Profitability & Returns
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Operating Margin | 10.8% | 19.9% (6.5%–38.3%) | -9.1pt |
| Net Margin | 5.9% | 5.6% (3.8%–22.2%) | +0.3pt |
Operating margin trails the industry median by 9.1pt, but net margin exceeds the median by 0.3pt, indicating non-operating income (foreign exchange gains, equity-method income) supports the profit structure.
Growth & Capital Efficiency
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Revenue Growth (YoY) | -6.5% | -0.5% (-0.9%–13.1%) | -6.0pt |
Revenue growth was -6.5%, 6.0pt below the industry median of -0.5%, reflecting normalization in revenues. While the industry shows some revenue contraction, the company’s decline is somewhat larger.
※ Source: Company compilation
Operating Cash Flow ¥6,524B equals 2.72x net income, and Free Cash Flow ¥805B confirms sufficient cash generation to cover total dividends ¥669B. The stable cash generation from the power business underpins both dividends and investment, supporting the sustainability of shareholder returns through temporary profit declines.
Ordinary Income ¥5,185B this period was substantially supported by non-operating income — foreign exchange gains ¥437B (≈8.4%) and equity-method investment income ¥337B (≈6.5%) — and next-period guidance projects Ordinary Income ¥2,900B (-44.1%). The guidance is conservative, reflecting the removal of these non-recurring contributors, and post-normalization profit baselines appear to center around Operating Income of roughly ¥2,500B (operating margin ~5.6%).
By segment, high-margin Lifestyle & Business Solutions (17.5%) and Information & Communications (14.8%) help mitigate the Energy concentration (68.4%) through diversification. Expanding high-margin non-energy businesses is a strategic path to stabilize group earnings and improve capital efficiency.
This report is an AI-generated financial analysis document based on XBRL financial statement data. It is not a recommendation to invest in any particular security. Industry benchmarks are compiled by the firm from public financial statements and are for reference only. Investment decisions are your responsibility; consult a professional advisor as needed.