| 指標 | 当期 | 前年同期 | YoY |
|---|---|---|---|
| Revenue / Net Sales | ¥22472.1B | ¥23568.3B | -4.7% |
| Operating Income / Operating Profit | ¥2248.5B | ¥1995.6B | +12.7% |
| Ordinary Income | ¥2070.6B | ¥1946.7B | +6.4% |
| Net Income / Net Profit | ¥1095.7B | ¥934.0B | +17.3% |
| ROE | 8.9% | 9.1% | - |
For the fiscal year ended March 2026 (FY2026), the Company reported Revenue of ¥22,472B (YoY -¥1,097B -4.7%), a decline in sales, while Operating Income was ¥2,249B (YoY +¥253B +12.7%), Ordinary Income was ¥2,071B (YoY +¥124B +6.4%), and Net Income attributable to owners of the parent was ¥1,546B (YoY +¥258B +20.0%), achieving double-digit profit growth at each level. The revenue decline alongside profit improvement reflects a reduction in government subsidies (support for electricity and gas bill burdens, etc.) recognized in the prior year, which reduced Revenue, while profitability in generation and retail operations improved and non-operating expenses were restrained, enhancing profit levels. Operating margin improved to 10.0% (up +1.5pt from 8.5% in the prior year) and net margin to 6.9% (up +1.5pt from 5.4%), indicating a structural recovery in profitability.
【Revenue】Revenue was ¥22,472B (YoY -4.7%), a decrease of ¥1,097B. By segment, the Generation & Retail Business recorded ¥17,014B (YoY -7.8%), with the core business turning to lower sales. The primary cause was a ¥20.3B? (Note: preserve numbers exactly — original states reduction from 746億円 to 543億円, a decrease of 203億円) reduction in government subsidies recorded as "other income" in the prior year (measures to mitigate sharp electricity and gas price fluctuations, emergency support for extreme heat, electricity and gas bill burden support) from ¥746B to ¥543B, a decrease of ¥203B. Meanwhile, the Transmission & Distribution Business posted ¥2,697B (+5.7%), Other Energy Services ¥1,462B (+9.3%), and ICT Services ¥1,058B (+10.6%), maintaining revenue growth trends. Segment composition ratios were Generation & Retail 75.7%, Transmission & Distribution 12.0%, Other Energy Services 6.5%, and ICT Services 4.7%, indicating high dependence on the core business.
【Profitability】Operating Income was ¥2,249B (+12.7%), a substantial increase. Despite the subsidy reduction, the increase at the operating level was mainly driven by expansion in the Generation & Retail segment profit to ¥1,364B (+19.2%). Stabilization of fuel costs and normalization of sales margins are presumed to have contributed. Conversely, Transmission & Distribution segment profit fell sharply to ¥83B (from ¥266B in the prior year, -68.8%), with regulated efficiency demands compressing margins. In non-operating results, non-operating income totaled ¥419B (including dividend income of ¥68B and foreign exchange gains of ¥55B) against non-operating expenses of ¥597B (including interest expense of ¥345B), resulting in a net burden of ¥178B and Ordinary Income of ¥2,071B (+6.4%), a growth rate lower than that of Operating Income. Extraordinary losses were limited at ¥139B (including impairment losses of ¥77B). From Profit before Income Taxes of ¥2,078B, tax expense was ¥522B (effective tax rate 25.2%) and non-controlling interests of ¥10B were deducted, resulting in Net Income attributable to owners of the parent of ¥1,546B (+20.0%). Comprehensive income was ¥2,245B (from ¥1,420B in the prior year, +58.1%), with a significant contribution from a ¥565B improvement in retirement benefit adjustments. In conclusion, the Company absorbed the revenue decline caused by subsidy reductions through improved profitability in Generation & Retail, achieving higher profits despite lower revenue.
The Generation & Retail Business drove company profits, with segment profit of ¥1,364B (from ¥1,144B in the prior year, +19.2%). The Transmission & Distribution Business saw Revenue of ¥2,697B (+5.7%) but segment profit plunged to ¥83B (from ¥266B in the prior year, -68.8%), with margin falling to 3.1% (from 10.0% in the prior year). Regulatory revenue compression and efficiency demands appear to have pressured margins. Other Energy Services reported Revenue of ¥1,462B (+9.3%) and segment profit of ¥369B (+11.1%), maintaining a profit margin of approximately 25.2%. ICT Services posted Revenue of ¥1,058B (+10.6%) and segment profit of ¥106B (+0.5%), with revenue growth but slowed profit expansion, maintaining a margin of about 10.0%. Urban Development recorded Revenue of ¥161B (-8.7%) but segment profit of ¥52B (+50.0%), achieving a high margin of approximately 32.2%, indicating high-quality asset-related earnings. Overseas operations had external revenue of ¥37B (-16.2%) and, though small-scale, segment profit of ¥126B (+11.2%) remained stable thanks to contributions from equity-method investment earnings.
【Profitability】ROE was 8.9% (estimated comparable level to prior-year performance around 12.6%), ROA (on Ordinary Income basis) 3.5%, Operating Margin 10.0% (improved +1.5pt from 8.5% in the prior year), and Net Margin 6.9% (improved +1.5pt from 5.4%), indicating improving profitability. EBITDA margin was approximately 20.1% (EBITDA approximately ¥4,510B ÷ Revenue ¥22,472B), demonstrating strong cash generation. 【Cash Quality】Operating Cash Flow / Net Income ratio was 2.84x, and Operating Cash Flow / EBITDA ratio was 0.97x, indicating solid cash backing for profits. The accrual ratio ((Net Income − Operating Cash Flow) / Total Assets) was -4.8%, negative, indicating a high-quality earnings structure that generates more cash than accounting profit. 【Investment Efficiency】Total Asset Turnover was 0.376x, capital expenditure was ¥3,662B versus depreciation of ¥2,262B, giving a CapEx/Depreciation multiple of 1.62x, indicating a growth investment phase. Basic EPS was ¥314.65 (from ¥260.14 in the prior year, +21.0%), BPS ¥2,093.78 (from ¥1,685.7 in the prior year, +24.2%), showing a substantial increase in per-share value. 【Financial Soundness】Equity Ratio was 20.5% (improved +3.2pt from 17.3% in the prior year), D/E ratio 3.88x, Debt/EBITDA 4.03x, and interest-bearing debt / equity 59.7% — still a high-leverage profile, but shareholders’ equity increased to ¥12,259B (from ¥10,313B in the prior year, +18.9%) due to profit accumulation and pension asset improvements. Current Ratio was 76.5% and Quick Ratio 67.9%, indicating short-term liquidity at cautionary levels, but Cash and Deposits of ¥3,684B cover short-term borrowings of ¥1,264B by approximately 2.9x. Interest coverage (EBIT / Interest Expense) was 6.52x and EBITDA / Interest Expense 13.09x, indicating sufficient tolerance for interest burden.
Operating Cash Flow was ¥4,387B (from ¥4,319B in the prior year, +1.6%), remaining robust. Subtotal of Operating Cash Flow (before working capital changes) was ¥4,710B; major working capital movements were decrease in trade receivables +¥363B, increase in inventories -¥156B, and decrease in accounts payable -¥169B. After deducting corporate taxes paid of -¥254B and accounting for interest and dividend receipts/payments (receipts ¥265B, payments -¥334B), Operating Cash Flow was formed. Investing Cash Flow was -¥3,837B (from -¥3,589B in the prior year), mainly due to acquisitions of fixed assets of -¥3,662B. Net investing cash outflow occurred including construction subsidy receipts of ¥227B. Financing Cash Flow was -¥577B, with proceeds from long-term borrowings of ¥2,171B against repayments of -¥2,414B, bond issuance of ¥1,687B against redemptions of -¥1,669B, and dividend payments of -¥295B as main items. Free Cash Flow (Operating CF + Investing CF) was positive ¥550B, establishing a structure capable of covering dividends and interest-bearing debt repayments with internal funds. Cash and cash equivalents at the end of the period were ¥3,512B (from ¥3,497B at the beginning of the period, +¥8B), remaining almost flat.
Core earnings derive from operating activities (Operating Income ¥2,249B). Non-operating results were a net -¥178B (Non-operating income ¥419B, Non-operating expenses ¥597B), which dragged on profits, but equity-method investment income of ¥132B supported Ordinary Income. Non-operating income was limited at 1.9% of Revenue, mainly dividends received ¥68B and foreign exchange gains ¥55B. The bulk of non-operating expenses was interest expense ¥345B, making financial costs a compressing factor at the ordinary income level. Extraordinary losses were limited at ¥139B (including impairment losses of ¥77B), and the decline from Ordinary Income ¥2,071B to Net Income ¥1,546B (a drop of 25.3%) was mainly due to tax burden (effective tax rate 25.2%) and extraordinary losses. Comprehensive income ¥2,245B exceeded net income by ¥690B, with ¥565B of the ¥689B other comprehensive income improvement attributable to retirement benefit adjustments. The accrual ratio was -4.8% and Operating CF / EBITDA 0.97x, indicating strong cash backing for profits and a high share of recurring earnings, i.e., good quality of earnings.
For FY2027 (fiscal year ending March 2027), the Company’s full-year guidance is Revenue ¥23,000B (YoY +2.3%), Operating Income ¥2,100B (YoY -6.6%), Ordinary Income ¥1,800B (YoY -13.1%), and Net Income attributable to owners of the parent ¥1,300B (YoY -15.9%), anticipating profit declines. The guidance is conservatively set relative to the current year and is presumed to incorporate further reductions in government subsidies, time lags in the fuel cost adjustment mechanism, and rising interest burdens. Progress against the full-year forecast (current results / full-year guidance) stands at Revenue 97.6%, Operating Income 107.1%, Ordinary Income 115.0%, and Net Income 118.9%, meaning current results exceeded the full-year guidance. Forecast EPS is ¥262.70 versus actual EPS ¥314.65, and forecast dividend ¥25 versus actual ¥50 (interim ¥25 + year-end ¥25); both profit and dividend exceeded forecasts. Achieving next year’s guidance will hinge on recovery of Transmission & Distribution margins, maintenance of Generation & Retail margins, and stability in interest rate environment.
Annual dividend was ¥50 (interim ¥25, year-end ¥25), unchanged from the prior year. Payout Ratio was 19.2% (with Net Income attributable to owners of the parent ¥1,546B and total dividends of approximately ¥295B), providing sufficient buffer. Total dividend payments amounted to ¥295B, equivalent to 53.7% of Free Cash Flow ¥550B, and FCF coverage was approximately 1.9x, indicating dividends are comfortably funded by internal cash. No share buyback was disclosed, so Total Return Ratio equals the Payout Ratio at 19.2%. Next-year dividend guidance is ¥25 (implying annualized ¥50), and even on the assumption of the guidance’s profit decline, the payout ratio is expected to stay around 25%, making dividend sustainability high given Operating CF levels. Retained earnings were ¥6,211B (from ¥4,961B in the prior year, +25.2%), strengthening internal reserves that underpin dividend stability.
Short-term liquidity risk: Current Ratio 76.5% and Quick Ratio 67.9% are below 1.0, with current liabilities of ¥12,160B versus current assets of ¥9,308B, indicating inherent maturity mismatch. Cash and deposits of ¥3,684B cover short-term borrowings of ¥1,264B by 2.9x, but working capital of -¥2,852B and the structure of advances/uneared liabilities require careful cash management. Concentration of large bond and long-term loan maturities entails refinancing risk.
Increased interest-rate sensitivity due to high leverage: With a D/E ratio of 3.88x, Debt/EBITDA 4.03x, and interest-bearing debt / equity 59.7%, the Company has a high-leverage profile and interest costs are rising (interest expense ¥345B, up +14.8% from ¥300B in the prior year). While interest coverage is 6.52x, interest rate increases could compress profits. Refinancing conditions for long-term borrowings of ¥1.69T and bonds of ¥1.44T could change financial costs.
Margin decline risk in Transmission & Distribution: Transmission & Distribution segment profit fell sharply to ¥83B (from ¥266B in the prior year, -68.8%), and margin declined to 3.1% (from 10.0% in the prior year). Continued regulatory reductions in allowed ROE or intensified efficiency demands could further reduce the contribution of the Transmission & Distribution business (12.0% of revenue composition), potentially weighing on consolidated profits.
Profitability & Returns
| 指標 | 自社 | 中央値 (IQR) | Delta |
|---|---|---|---|
| Operating Margin | 10.0% | 19.9% (6.5%–38.3%) | -9.9pt |
| Net Margin | 4.9% | 5.6% (3.8%–22.2%) | -0.8pt |
Operating margin is about 10pt below the industry median, while net margin is around the median; profitability is mid-to-lower within the industry.
Growth & Capital Efficiency
| 指標 | 自社 | 中央値 (IQR) | Delta |
|---|---|---|---|
| Revenue Growth (YoY) | -4.7% | -0.5% (-0.9%–13.1%) | -4.2pt |
Revenue growth lags the industry median by 4.2pt, with the subsidy reduction causing a larger YoY revenue decline within the industry.
※ Source: Company aggregation
Notable profit recovery and improvement in profitability despite revenue decline: Revenue fell YoY -4.7% due to subsidy reductions, but Operating Income +12.7% and Net Income +20.0% achieved double-digit profit growth. Operating margin improved to 10.0% (up +1.5pt from 8.5%) and Net margin to 6.9% (up +1.5pt from 5.4%), indicating structural profitability improvement. Expansion of Generation & Retail segment profit by +19.2% was the main driver, likely aided by stabilization of fuel costs and normalization of sales margins. Although next-year guidance projects lower profits, there is upside potential depending on fuel cost adjustments and regulatory trends.
Established cash generation capacity and dividend sustainability: Operating CF / Net Income 2.84x and Operating CF / EBITDA 0.97x show solid cash backing for profits, with positive Free Cash Flow of ¥550B. Payout Ratio 19.2% and FCF coverage about 1.9x indicate dividends are adequately funded internally, and retained earnings increased by +25.2%, bolstering reserves. Even assuming next-year profit decline, payout ratio should remain around 25%, and given Operating CF levels, dividend sustainability is high.
Ongoing monitoring required for short-term liquidity and leverage: Current Ratio 76.5% and Quick Ratio 67.9% indicate short-term liquidity at cautionary levels, and D/E ratio 3.88x and Debt/EBITDA 4.03x reflect continued high leverage. Interest expense is rising to ¥345B (from ¥300B, +14.8%), posing a profit-compression risk in rising-rate environments. Although interest coverage is 6.52x, refinancing terms and maturity management of bonds and long-term borrowings will be key to future financial stability.
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 specific security. Industry benchmarks are reference information compiled by the Company based on public financial statement data. Investment decisions are your own responsibility; consult professionals as needed before making investment decisions.