Quick View
| Metric | Current | Prior | YoY |
|---|---|---|---|
| Revenue | ¥97.8B | ¥87.9B | +11.3% |
| Operating Income | ¥5.8B | ¥6.0B | −3.5% |
| Ordinary Income | ¥3.3B | ¥5.1B | −35.6% |
| Net Income | ¥2.7B | ¥4.0B | −32.8% |
| ROE | 1.4% | 2.1% | - |
Executive Summary
F-On Corporation reported FY2026 Q2 results showing revenue of 9.78B yen (YoY +11.3%), operating income of 0.58B yen (YoY -3.5%), ordinary income of 0.33B yen (YoY -35.6%), and net income of 0.27B yen (YoY -32.8%). While the company achieved double-digit revenue growth, profitability declined significantly, primarily due to increased non-operating expenses including interest payments of 0.15B yen and derivative-related losses. The gross profit margin remained at 10.9%, constraining overall profitability, while operating margin compressed to approximately 6.0%. Total assets stood at 43.79B yen with equity of 18.78B yen, maintaining a current ratio of 167.6% and demonstrating adequate short-term liquidity despite substantial interest-bearing debt of 18.95B yen.
Performance Drivers
Revenue increased 11.3% YoY to 9.78B yen, driven by growth across all business segments. The Green Energy segment contributed 8.42B yen in sales with operating income of 0.43B yen, representing the core business with the largest revenue contribution. The Electricity Retail segment generated sales of 2.91B yen with operating income of 0.17B yen, including 0.027B yen in government subsidies received under the comprehensive economic measures to address price increases. The Energy Saving Support Service segment recorded sales of 0.17B yen with operating income of 0.027B yen. Despite the top-line expansion, operating income declined 3.5% to 0.58B yen, reflecting a gross profit margin of 10.9% and operating margin compression. The gap between operating income and ordinary income widened significantly, with ordinary income falling 35.6% to 0.33B yen. This deterioration was primarily driven by non-operating expenses totaling approximately 0.25B yen, comprising interest expenses of 0.15B yen and derivative-related losses. The interest burden coefficient of 0.563 indicates that approximately 44% of earnings are absorbed by interest costs. Net income declined 32.8% to 0.27B yen, with the effective tax burden coefficient at 0.817. This represents a revenue up, profit down pattern, where structural factors including elevated interest costs and low gross margins constrained profitability despite revenue growth.
Segment Analysis
The Green Energy segment serves as the core business, generating 8.42B yen in revenue with operating income of 0.43B yen, representing an operating margin of approximately 5.1%. The Electricity Retail segment contributed 2.91B yen in sales with operating income of 0.17B yen, achieving a margin of approximately 5.8%. This segment benefited from 0.027B yen in government subsidies under the electricity and gas price mitigation measures. The Energy Saving Support Service segment recorded 0.17B yen in sales with operating income of 0.027B yen, representing a margin of approximately 15.9%, the highest among the three segments. The segment data reveals that while the Energy Saving Support Service achieves superior profitability margins, the scale remains limited. The two larger segments operate at similar margins in the 5-6% range, contributing to the overall operating margin of 6.0%.
Key Metrics
[Profitability] ROE of 1.4% reflects significant compression from prior year levels, driven by net profit margin deterioration to 2.7% from approximately 4.5% in the prior year period. Operating margin of 6.0% represents a modest decline from the prior year, while gross profit margin remained at 10.9%, indicating structural profitability constraints at the top of the income statement. The DuPont analysis reveals that asset turnover improved to 0.223 from prior levels, financial leverage stands at 2.33 times, but the sharp decline in net profit margin from approximately 4.5% to 2.7% drove the overall ROE compression. Interest burden coefficient of 0.563 highlights that 44% of operating profit is consumed by interest expenses. [Cash Quality] Cash and deposits position and specific cash flow metrics are not disclosed in the quarterly data provided. Accounts receivable of 2.22B yen translates to days sales outstanding of approximately 83 days, suggesting potential working capital pressures. [Investment Efficiency] Asset turnover of 0.223 shows improvement in asset utilization efficiency, though absolute levels remain modest given the capital-intensive nature of the energy business. [Financial Health] Equity ratio of 42.9% indicates moderate capitalization, current ratio of 167.6% demonstrates adequate short-term liquidity coverage at 1.68 times current liabilities, and debt-to-equity ratio of 1.33 reflects meaningful leverage. Interest-bearing debt of 18.95B yen, primarily long-term borrowings, generates interest coverage (EBIT to interest expense) of approximately 3.84 times, indicating limited margin for deterioration in operating performance.
Cash Flow Analysis
Total assets decreased 0.79B yen YoY to 43.79B yen while equity increased 0.10B yen to 18.78B yen, suggesting net debt reduction or asset optimization activities during the period. Current assets of 9.06B yen provide coverage of 1.68 times against current liabilities of 5.41B yen, maintaining adequate short-term liquidity. Working capital composition shows accounts receivable at 2.22B yen representing approximately 83 days of sales, indicating extended collection periods that tie up operating capital. The company maintains interest-bearing debt of 18.95B yen primarily in long-term borrowings of 18.95B yen, with interest payments of 0.15B yen during the period representing an implied cost of approximately 1.6% on an annualized basis. The balance sheet structure suggests the company prioritizes financial stability with current ratio exceeding 160%, though the working capital efficiency measured by receivables turnover warrants monitoring for potential improvement opportunities.
Earnings Quality
Ordinary income of 0.33B yen compared to operating income of 0.58B yen reflects a non-operating net expense of approximately 0.25B yen, representing 2.6% of revenue. The primary components comprise interest expenses of 0.15B yen and derivative-related evaluation losses that significantly impacted the period. Non-operating expenses consumed approximately 43% of operating income, highlighting the material impact of financial costs and derivative positions on bottom-line profitability. The gap between operating income (down 3.5%) and net income (down 32.8%) demonstrates that non-operating factors were the primary driver of earnings deterioration rather than core business performance. The derivative-related losses represent potential volatility in future periods depending on market conditions and hedging positions. The composition of non-operating items suggests that core operating performance remained relatively stable while financial engineering and interest burden created significant earnings pressure. Absent cash flow statement data for the quarterly period, direct comparison of operating cash flow to net income cannot be assessed, though the balance sheet movements suggest cash position management remains under control with adequate liquidity ratios.
Guidance Update
The company's full-year forecast projects revenue of 19.50B yen (YoY +10.8%), operating income of 1.40B yen (+6.0%), ordinary income of 0.90B yen (-18.4%), and net income of 0.63B yen. Q2 progress rates stand at 50.1% for revenue, 41.6% for operating income, 36.4% for ordinary income, and 42.5% for net income against full-year targets. Revenue tracking aligns with the standard 50% midpoint expectation, while operating income and net income progress rates fall approximately 8-10 percentage points below the 50% benchmark. The shortfall in profit progress rates versus revenue indicates that the second half requires substantial improvement in profitability, particularly at the ordinary and net income levels. The company's forecast assumes ordinary income decline of 18.4% for the full year, reflecting expectations that elevated non-operating expenses including interest costs and potential derivative impacts will persist. Achievement of the full-year net income target of 0.63B yen requires the second half to generate approximately 0.36B yen, representing a significant acceleration from the first half run rate. Key assumptions supporting the forecast likely include stabilization of derivative-related volatility and sustained revenue momentum across all segments.
Shareholder Returns
The company plans an annual dividend of 8.00 yen per share, consisting of no interim dividend and a year-end dividend of 8.00 yen. Based on Q2 cumulative net income of 0.27B yen and the announced year-end dividend, the calculated payout ratio appears elevated at 64.6%. However, this figure reflects the timing effect of zero interim dividend combined with a concentrated year-end payment. When evaluated against the company's full-year net income forecast of 0.63B yen, the projected payout ratio normalizes to approximately 27%, indicating a sustainable dividend policy aligned with earnings capacity. The dividend policy demonstrates management's confidence in achieving the full-year earnings target, as the year-end dividend commitment is maintained despite first-half profit pressures. No share buyback programs are disclosed in the available data. The sustainability of the 8.00 yen dividend depends critically on the company realizing its full-year net income forecast of 0.63B yen, which requires significant second-half profit improvement from current run rates.
Risk Factors
Low gross margin structure at 10.9% constrains overall profitability and limits the company's ability to absorb cost increases or competitive pressures. This structural characteristic of the business model, particularly in the Green Energy and Electricity Retail segments operating at 5-6% operating margins, creates vulnerability to any deterioration in pricing power or cost inflation. Extended accounts receivable collection period of approximately 83 days represents working capital efficiency and credit risk exposure, particularly relevant in energy retail businesses where customer payment behavior can be volatile. Should collection periods extend further or bad debt rates increase, both cash flow and earnings quality would deteriorate. High interest-bearing debt of 18.95B yen combined with interest expense of 0.15B yen annually creates significant sensitivity to interest rate movements and refinancing risk. The interest coverage ratio of 3.84 times provides limited cushion, and any increase in borrowing costs or deterioration in EBIT would rapidly compress coverage metrics. Additionally, derivative-related losses during the period highlight exposure to market volatility and hedging position risks that can materially impact non-operating income.
Industry Benchmark (Reference - Proprietary Data)
[Industry Position] (Reference - Proprietary Analysis) The company's operating margin of 6.0% for FY2026 Q2 compares to its own historical range, with revenue growth of 11.3% representing acceleration from prior periods. Net profit margin of 2.7% reflects compression from historical levels due to elevated non-operating expenses. In the context of energy retail and green energy sectors, operating margins in the mid-single digits are characteristic of businesses with commodity-like characteristics and significant capital requirements. The company's gross margin structure at 10.9% suggests limited pricing power and competitive intensity in its primary markets. The interest-bearing debt level relative to equity (D/E ratio of 1.33) and operating cash generation capacity creates interest coverage metrics that rank as requiring close monitoring, with interest coverage of 3.84 times leaving limited room for operating deterioration. The extended receivables collection period of 83 days exceeds typical targets for retail-oriented businesses and represents an area for operational improvement. ROE of 1.4% falls well below typical industry expectations, driven primarily by the net margin compression and high interest burden. The company's current ratio of 167.6% and equity ratio of 42.9% demonstrate adequate financial stability positioning within industry norms. Based on the segment disclosure, the dominance of Green Energy operations positions the company within renewable energy and energy services sectors where margin profiles are typically constrained by regulatory frameworks and commodity price exposure.
Key Takeaways from Earnings
Revenue growth momentum of 11.3% demonstrates the company's ability to expand its business scale across all operating segments, with the Green Energy segment serving as the primary growth engine contributing over 8.4B yen in sales. This top-line expansion, combined with improving asset turnover to 0.223, indicates operational scale benefits are being realized. However, the structural profitability challenge evident in the 10.9% gross margin creates a fundamental constraint on earnings conversion from revenue growth, requiring careful monitoring of whether scale benefits can improve margin profiles over time. The deterioration in ordinary and net income driven primarily by non-operating factors rather than core operating performance suggests that financial engineering aspects including interest costs consuming 44% of operating profit and derivative position management represent critical value drivers requiring management attention. The gap between Q2 profit progress rates of 36-42% against full-year targets versus 50% revenue progress creates execution risk for the second half forecast, necessitating validation of whether the implied second-half profit acceleration materializes. The planned year-end dividend of 8.00 yen appears sustainable when evaluated against full-year earnings guidance at approximately 27% payout ratio, though actual sustainability depends on forecast achievement given the current run rate shortfall, making dividend coverage a key metric to monitor through year-end results.
This report was automatically generated by AI analyzing XBRL earnings data as an earnings analysis tool. This is not a recommendation to invest in any specific security. Industry benchmarks are reference information compiled from publicly available earnings data. Please make investment decisions at your own responsibility and consult professionals as needed.
AI Financial Analysis
Executive Summary
FY2026 Q2 results were mixed: revenue expanded at a double-digit rate, but profitability weakened materially below operating income because of higher non-operating costs. Revenue rose 11.3% year on year to ¥9.78bn. Operating income declined 3.5% to ¥0.58bn despite the higher sales base. Gross profit was essentially flat at ¥1.06bn, indicating that incremental revenue did not translate into incremental gross earnings. The gross margin compressed by approximately 123bp to 10.9% from 12.1% in the prior-year period. SG&A increased 4.6% to ¥0.48bn, slower than revenue growth, and the SG&A-to-sales ratio improved by about 31bp to 4.9%. Nevertheless, the gross-margin decline drove an operating-margin contraction of approximately 91bp to 6.0%. Ordinary income fell 35.6% to ¥0.33bn, substantially underperforming operating income. Net income fell 32.8% to ¥0.27bn, equivalent to EPS of ¥12.69. Net margin contracted by approximately 180bp to 2.7% from 4.5%. The principal earnings pressure below operating income was the increase in non-operating expenses to ¥0.34bn from ¥0.16bn. Interest expense rose to ¥0.15bn from ¥0.15bn, while loss on valuation of derivatives increased sharply to ¥0.17bn from ¥0.01bn. This derivative-related loss was the principal reason ordinary-income growth lagged operating performance. The effective tax rate was relatively low at 18.0%, supporting the conversion of pre-tax income into net income, but it did not offset the weaker pre-tax result. Annualized ROE was 2.9%, reflecting a thin net margin and only moderate asset turnover despite leverage. The balance sheet remains liquid, with a 167.6% current ratio and ¥5.27bn of cash and deposits, but it is capital intensive, with PPE representing 77.1% of total assets. Debt reduction continued, as long-term loans declined by ¥0.98bn year on year to ¥18.95bn, although interest-bearing obligations remain significant relative to operating earnings. Full-year company guidance implies a more back-end-weighted earnings profile: Q2 progress is 50.1% for sales but only 41.6% for operating income, 36.4% for ordinary income, and 42.5% for net income. The central forward-looking issue is whether power-generation economics and derivative valuation effects normalize sufficiently in the second half to deliver the guided ¥1.40bn operating income and ¥0.63bn net income.
Profitability Analysis
Annualized DuPont ROE is 2.9%, decomposed into a 2.7% net profit margin, 0.447x asset turnover, and 2.33x financial leverage. The weakest component is net margin, which fell to 2.7% as revenue growth was more than offset by gross-margin compression and a marked deterioration in non-operating costs. Financial leverage supports reported ROE, but it does not compensate for the low profitability generated by the asset base. The annualized 0.447x asset turnover is consistent with a capital-intensive generation portfolio, as PPE accounts for 77.1% of assets. Operating margin declined to 6.0% from approximately 6.9% in the prior-year period, even though SG&A growth of 4.6% was below the 11.3% revenue increase. Accordingly, operating leverage at the SG&A level was positive, but it was outweighed by pressure in cost of sales, which increased 12.8% to ¥8.72bn and grew faster than sales. The low 10.9% gross margin is a material quality alert: it leaves limited buffer against biomass fuel, electricity procurement, maintenance, and selling-price volatility. For a biomass power and electricity retail operator, this margin profile heightens sensitivity to changes in fuel costs and power-market spreads. Annualized ROIC of 2.9% is also a material capital-efficiency alert, below the 5% caution threshold and indicative of limited current returns on the large installed asset base. The 5-factor DuPont analysis shows a normal tax burden of 0.817, but an interest burden of only 0.563, meaning that approximately 44% of EBIT was absorbed by net interest and other below-EBIT costs. This high interest burden is significant because it converts a 6.0% EBIT margin into only a 2.7% net margin. Sustainability of profit recovery depends on restoring gross margin and limiting non-operating volatility, rather than relying on further SG&A restraint.
Growth Assessment
Top-line momentum was solid, with first-half revenue up 11.3% year on year to ¥9.78bn. However, gross profit was nearly unchanged at ¥1.06bn versus ¥1.06bn a year earlier, demonstrating weak earnings conversion on the additional ¥0.89bn of sales. Cost of sales increased 12.8%, exceeding revenue growth and causing the gross-margin decline. Operating income fell 3.5%, while ordinary income and net income declined more sharply by 35.6% and 32.8%, respectively. The gap between operating-income and ordinary-income trends indicates that growth quality weakened below the operating line. Subsidy income was ¥0.36bn, including ¥0.27bn associated with the government electricity and gas price-relief program recorded in the electricity retail business. This support contributes to reported income but should be assessed separately from underlying market-based retail economics. The ¥0.17bn derivative valuation loss is a major source of period-to-period earnings volatility. Full-year sales guidance of ¥19.50bn implies 50.1% first-half progress, broadly aligned with the standard 50% midpoint. In contrast, operating-income progress is 41.6%, 8.4 percentage points below the standard midpoint, while ordinary-income progress is 36.4%, 13.6 percentage points below it. Net-income progress is 42.5%, also below the standard midpoint by 7.5 percentage points. The ordinary-income shortfall versus the standard seasonal benchmark is material and requires a second-half improvement in financing and derivative-related costs. The full-year plan calls for 10.8% sales growth and 6.0% operating-income growth, implying a recovery in second-half operating profit conversion. In the utility and renewable-power context, sustainable growth will depend on biomass fuel availability and pricing, plant availability, electricity market conditions, and the degree to which input-cost changes can be passed through to customers or reflected in power sales prices.
Financial Health
Liquidity is sound on reported balance-sheet measures. The current ratio and quick ratio were both 167.6%, and working capital was ¥3.65bn. Cash and deposits of ¥5.27bn covered current liabilities of ¥5.41bn to a substantial extent, while trade receivables were ¥2.22bn. There is no current-ratio warning because the ratio is well above 1.0x. Total equity was ¥18.78bn, up modestly from ¥18.68bn a year earlier, and the equity ratio improved to 42.9% from 41.9%. Total liabilities declined ¥0.88bn year on year to ¥25.01bn. Long-term loans decreased ¥0.98bn to ¥18.95bn, indicating gradual deleveraging. Current portions of long-term loans also declined to ¥2.03bn from ¥2.11bn. The reported debt-to-equity ratio is 1.33x, below the 2.0x aggressive-leverage warning threshold, but still meaningful for a company earning a 6.0% EBIT margin. Debt-to-capital was 50.2%, above the 40% investment-grade reference point but below the 60% concern threshold. Interest coverage was 3.84x, below the 5.0x strong-coverage benchmark but above the 3.0x concern threshold. The high-interest-burden alert is therefore material: interest expense of ¥0.15bn consumed a large share of EBIT and constrains earnings resilience. This structure is typical of asset-intensive independent power generation to an extent, but the combination of capital intensity and modest ROIC makes debt-servicing capacity sensitive to operating-margin pressure. Construction in progress rose by ¥0.53bn year on year to ¥0.84bn, indicating ongoing project investment and future execution requirements. No material goodwill concentration is indicated; intangible assets represent only 1.7% of total assets.
Notable B/S Changes
Construction in progress: +¥0.53bn (+173%) to ¥0.84bn - indicates increased project investment and raises execution and funding requirements. Cash and deposits: -¥0.50bn (-8.6%) to ¥5.27bn - cash resources declined while capital projects expanded, increasing the importance of operating cash generation. Long-term loans: -¥0.98bn (-4.9%) to ¥18.95bn - gradual debt reduction supports solvency, although borrowings remain large relative to operating earnings. Other accounts payable: +¥0.32bn (+48.5%) to ¥0.97bn - a notable change in short-term operating liabilities that should be monitored alongside cash conversion. Property, plant and equipment: -¥0.24bn (-0.7%) to ¥33.75bn - the asset base remains dominant at 77.1% of total assets, maintaining high exposure to utilization and maintenance performance.
Cash Flow Quality
Reported earnings quality cannot be assessed through operating cash flow or free cash flow in this period because no cash-flow amounts are provided. Consequently, no OCF-to-net-income ratio, accruals ratio, cash conversion ratio, or free-cash-flow coverage measure is presented. Balance-sheet movements nevertheless indicate relevant working-capital and investment factors. Cash and deposits declined by ¥0.50bn year on year to ¥5.27bn. Trade receivables increased ¥0.10bn to ¥2.22bn, a relatively modest movement compared with the ¥0.99bn increase in revenue. Trade payables decreased ¥0.07bn to ¥1.41bn, while other payables increased ¥0.32bn to ¥0.97bn. Supplies and spare parts declined ¥0.06bn to ¥0.98bn, which may provide a limited working-capital benefit but remains operationally relevant for plant maintenance. Construction in progress increased by ¥0.53bn to ¥0.84bn, consistent with continued capital deployment. The combination of lower cash and higher construction in progress reinforces the importance of future operating cash generation, particularly given the debt load. The ¥0.17bn loss on valuation of derivatives reduced reported income but is non-cash at the point of valuation; subsequent cash implications depend on contract settlement and hedge structure. The ¥0.07bn gain on sale of assets was small relative to revenue and did not materially affect earnings quality.
Dividend Sustainability
No interim dividend was declared for FY2026 Q2. The full-year forecast calls for DPS of ¥8.00 against forecast EPS of ¥29.78, implying a dividend-only payout ratio of approximately 26.9%. This forecast payout ratio is conservative relative to the 60% sustainability reference threshold. Retained earnings were ¥15.45bn, providing a substantial accounting reserve relative to the planned cash dividend. The absence of an interim dividend means shareholder distributions are concentrated in the year-end payment under the current forecast. Dividend sustainability ultimately depends on delivery of the ¥0.63bn full-year net-income forecast and on cash generation after debt service and construction spending. Given the company’s modest annualized ROE of 2.9%, high fixed-asset intensity, and 3.84x interest coverage, preserving financial flexibility remains important. The current forecast dividend level appears modest relative to forecast earnings, but the margin and interest-burden trajectory should remain the principal determinants of distribution capacity.
Risk Assessment
Business risks include High priority — biomass fuel and power-market economics: the 10.9% gross margin and 123bp year-on-year margin compression leave profitability highly sensitive to fuel procurement costs, electricity prices, plant utilization, and maintenance outages., High priority — derivative valuation volatility: loss on valuation of derivatives increased to ¥0.17bn from ¥0.01bn, materially reducing ordinary income and creating uncertainty around hedging outcomes and future market-price movements., Medium priority — second-half execution: ordinary-income progress is 36.4% of full-year guidance, 13.6 percentage points below the standard first-half progress rate, requiring a substantial recovery in the second half., Medium priority — electricity retail policy exposure: ¥0.27bn of government price-relief-program subsidy was recorded in electricity retail, exposing reported revenue and profit composition to changes in policy support and customer pricing conditions., Medium priority — generation asset reliability: PPE represents 77.1% of assets; unplanned outages, lower operating availability, or major repair needs could have an outsized effect on sales, margins, and capital requirements..
Financial risks include High priority — interest burden: the interest burden of 0.563 indicates that roughly 44% of EBIT was consumed below the operating line, while interest coverage of 3.84x is below the 5.0x strong benchmark., Medium priority — leverage and refinancing: debt-to-equity is 1.33x and debt-to-capital is 50.2%; these are not at aggressive-warning levels but remain meaningful relative to annualized ROIC of 2.9%., Medium priority — capital expenditure funding: construction in progress increased ¥0.53bn year on year and cash declined ¥0.50bn, making project execution and funding discipline important., Medium priority — low return on invested capital: annualized ROIC of 2.9% is below 5%, increasing the risk that returns remain below funding costs if operating margins do not recover..
Key concerns include The low gross-margin alert is central: cost of sales grew 12.8% versus 11.3% revenue growth, limiting operating leverage despite SG&A discipline., The high-interest-burden alert has direct valuation and resilience implications because low-margin operating earnings are vulnerable to financing-cost increases and other non-operating losses., The capital-efficiency alert reflects a large, capital-intensive asset base producing annualized ROE and ROIC of only 2.9%; improvement requires better margins, higher utilization, or more efficient capital allocation., Ordinary income declined 35.6%, far more than the 3.5% operating-income decline, underscoring the need to monitor derivative valuation effects and net financing costs..
Investment Implications
Key takeaways include Revenue growth remained robust at 11.3%, but profit conversion weakened as gross margin fell to 10.9%., SG&A efficiency improved, but it was insufficient to offset higher cost of sales and lower gross profitability., Derivative valuation losses and financing costs were the main drivers of the sharp decline in ordinary income and net income., Liquidity is healthy, while leverage is manageable but material for the level of operating return and interest coverage., Full-year guidance requires a second-half earnings recovery, particularly below operating income..
Metrics to watch include Gross margin and cost-of-sales growth relative to revenue growth, Operating margin versus the FY2026 full-year operating-income target of ¥1.40bn, Derivative valuation gains or losses and their relationship to hedging activity, Interest expense and interest coverage, Long-term loan balances, current loan maturities, and debt-to-capital, Construction in progress and the operating contribution from new or upgraded assets, Progress toward full-year ordinary income of ¥0.90bn and net income of ¥0.63bn, Biomass fuel costs, plant availability, and electricity-market pricing.
Regarding relative positioning, Compared with broad profitability benchmarks, the company’s 6.0% operating margin is below the 8% threshold generally viewed as good, its 2.7% net margin is below the 3% caution threshold, and annualized ROE of 2.9% is below the 8% concern threshold. Its liquidity profile is stronger than its profitability profile, with current and quick ratios of 167.6%. For an asset-intensive renewable-power operator, the key relative issue is whether operating returns can rise sufficiently above financing costs and sustain a better spread on the large generation asset base.