| Metric | Current Period | Prior Year Period | YoY |
|---|---|---|---|
| Revenue | ¥876.2B | ¥702.5B | +24.7% |
| Operating Income | ¥82.8B | ¥40.7B | +103.7% |
| Profit Before Tax | ¥58.6B | ¥39.0B | +50.4% |
| Net Income | ¥46.2B | ¥34.4B | +34.3% |
| ROE | 2.5% | 2.6% | - |
For the fiscal year ended March 2026, revenue was ¥876.2B (YoY +¥173.8B +24.7%), operating income was ¥82.8B (YoY +¥42.2B +103.7%), ordinary income was ¥74.4B (YoY +¥47.4B +136.6%), and profit attributable to owners of parent was ¥33.1B (YoY +¥6.2B +23.1%), resulting in significant top-line and operating-stage growth. The core Renewable Energy Power Generation and related businesses operated smoothly and drove revenue; operating margin improved to 9.5% from 5.8% a year earlier (+3.7pt), and EBITDA margin remained high at 29.8% (EBITDA ¥260.8B). Meanwhile, finance costs increased to ¥72.4B (prior year ¥58.9B), and the effective tax burden on profit before tax of ¥58.6B was heavy at 78.8%, leaving the final net margin at 3.8%, roughly flat year-on-year. Other comprehensive income increased materially to ¥499.6B, driven by cash flow hedge OCI +¥472.4B, and total equity attributable to owners of parent expanded to ¥1,228.5B (YoY +¥337.4B), improving the equity ratio to 20.1% (prior year 16.8%). Operating Cash Flow was high at ¥282.7B (prior year ¥314.9B), and Free Cash Flow was ¥165.6B, confirming robust cash generation as a project finance-style IPP. Interest-bearing debt stood at approximately ¥3,321B, with D/E of 2.29x and Debt/EBITDA of 12.7x, indicating continued high leverage, but short-term liquidity is solid with a current ratio of 218%, maintaining near-term financial stability.
【Revenue】 Revenue rose sharply to ¥876.2B (YoY +24.7%). The core Renewable Energy Power Generation and related businesses totaled ¥864.3B (YoY +26.6%), accounting for 98.6% of total revenue, driven by asset additions and improved utilization rates. Major customers included Tohoku Electric Power Network ¥197.3B, NTT Anode Energy ¥186.0B, Kyushu Electric Power Transmission & Distribution ¥160.7B, Shikoku Electric Power Transmission & Distribution ¥123.8B, and Chubu Electric Power Grid ¥99.9B, indicating sales to large transmission and distribution utilities form the core and support demand stability. Development & Operations revenues were ¥11.9B (YoY -38.9%), declining significantly due to timing differences in project progress.
【Profit & Loss】 Operating income doubled to ¥82.8B (YoY +103.7%). Fuel costs increased to ¥405.2B (YoY +28.7%) in line with higher sales, but remained controlled at 46.2% of revenue, nearly flat YoY. Outsourcing expenses were ¥52.1B (YoY +13.2%), personnel expenses ¥46.2B (YoY +3.6%) and were contained; depreciation and amortization was ¥178.0B (YoY +7.8%) reflecting more operating assets. Other expenses rose to ¥139.5B (prior year ¥104.5B), while equity-method income of ¥9.1B (prior year ¥8.3B) contributed, lifting operating margin to 9.5% (prior year 5.8%), up 3.7pt. Non-operating items included a remeasurement gain of ¥16.8B from a business combination and an option fair value gain of ¥12.2B as one-off items, but finance costs rose 23.0% to ¥72.4B (prior year ¥58.9B) due to higher borrowings and interest rates. Profit before tax rose to ¥58.6B (prior year ¥39.0B), but with corporate taxes of ¥12.4B plus increases in deferred tax liabilities, the effective tax burden reached an extremely high 78.8%, leaving net income at ¥46.2B (YoY +34.3%) and profit attributable to owners of parent at ¥33.1B (YoY +23.1%), keeping final net margin at 3.8% similar to the prior year. In conclusion, despite revenue and operating income growth, interest and tax burdens continue to constrain net income growth.
The Renewable Energy Power Generation and related businesses expanded steadily with revenue of ¥864.3B (prior year ¥682.9B, +26.6%) and segment profit of ¥338.6B (prior year ¥268.2B, +26.3%), maintaining a high margin of 39.2% (prior year 39.3%). The Development & Operations segment recorded revenue of ¥11.9B (prior year ¥19.5B, -38.9%) and segment profit of ¥18.96B (prior year ¥5.4B, +3.5x); while revenue decreased due to project timing, highly profitable projects delivered a 159.1% margin. Consolidated operating income after inter-segment eliminations was ¥82.8B, and including corporate costs, EBITDA was ¥260.8B (29.8% of revenue), indicating stable earnings from generation businesses are the source of consolidated profits.
【Profitability】ROE was 3.1% (prior year 3.4%), remaining low; DuPont decomposition shows a structure of net profit margin 3.8% × total asset turnover 0.143 × financial leverage 3.29x. Operating margin improved materially to 9.5% (prior year 5.8%), and EBITDA/Revenue is high at 29.8%, but finance costs of ¥72.4B (prior year ¥58.9B) weigh on profit before tax, leaving interest coverage (EBIT/finance costs) at around 1.1x, which is fragile. The effective tax burden of 78.8% (prior year 11.8%) is extremely high and is the main cause of subdued net profit margin. 【Cash Quality】Operating Cash Flow of ¥282.7B is 8.6x net income, and OCF/EBITDA is 1.08x, indicating high cash earnings quality. The accrual ratio is -4.1%, showing a small divergence between accounting profit and cash generation. Against depreciation of ¥178.0B, capital expenditures were ¥54.2B (0.30x), indicating restrained investment that boosts short-term FCF but raises concerns about mid-term growth investment shortfalls. 【Investment Efficiency】ROIC (EBIT / (interest-bearing debt + equity)) is about 3.5%, below the cost of capital, showing that high leverage and interest burdens depress capital efficiency. Total asset turnover is low at 0.143x (prior year 0.133x), reflecting the asset-intensive nature of the business. 【Financial Soundness】Equity ratio improved to 20.1% (prior year 16.8%) but remains low. D/E is 2.29x (prior year 2.97x) and Debt/EBITDA is 12.7x, maintaining high leverage and embedded vulnerability to rising interest rates. Short-term liquidity is good with a current ratio of 218% (current assets ¥1,061B / current liabilities ¥487B), but note the existence of restricted deposits of ¥627B.
Operating Cash Flow was ¥282.7B (prior year ¥314.9B, -10.2%), declining YoY mainly due to working capital movements, but underlying cash generation remains healthy. Subtotal (before working capital changes) was ¥349.4B (prior year ¥389.4B); with depreciation ¥178.0B and after financial and tax adjustments, core cash generation stayed high. Trade receivables improved by +¥60.8B, inventories contributed +¥58.4B cash in, and trade payables were -¥31.4B cash out, resulting in a net working capital contribution of +¥84.9B. After corporate tax payments of ¥20.6B and interest payments of ¥61.2B, and subsidy receipts of ¥11.3B, operating cash flow remained robust. Investing Cash Flow was -¥117.2B, including capital expenditures ¥54.2B, intangible asset acquisitions ¥5.1B, contract fulfillment cost capitalizations ¥40.4B, and short-term loan increases ¥11.7B, partially offset by construction advance recoveries ¥15.9B, reflecting a continued conservative investment stance. Free Cash Flow was positive at ¥165.6B (Operating CF - Investing CF), indicating strong internal cash generation. Financing Cash Flow was -¥174.4B: despite long-term borrowings of ¥331.3B, there were long-term repayments of ¥439.4B and bond redemptions ¥70.0B resulting in net repayments of ¥178.1B; dividends of ¥12.1B (to non-controlling interests) and share buybacks of ¥0.8B were executed, and restricted deposits increased by +¥29.6B improving liquidity. Cash decreased by ¥9.4B, leaving ending cash of ¥230.8B (prior year ¥239.3B), roughly flat. Overall, high operating CF, positive FCF, and ongoing debt repayments indicate disciplined cash management.
Recurring earnings are highly stable, deriving from electricity sales and storage businesses in renewable energy generation, accounting for 98.6% of revenue. Non-operating one-off gains totaled ¥29.0B (remeasurement gain ¥16.8B and option fair value gain ¥12.2B), representing 49.5% of profit before tax of ¥58.6B—indicating a high dependence on one-off gains. Financial income of ¥19.3B includes equity-method income of ¥9.1B, showing strong business relevance, but net of finance costs ¥72.4B the net finance result is -¥53.1B, and interest burden reduces earnings quality. The accrual ratio is -4.1% and operating CF / net income is 8.6x, showing cash earnings materially exceed accounting profit and cash generation quality is very high. Other comprehensive income is mainly cash flow hedge effective portion +¥472.4B, which contributes to stabilizing future cash flows but also implies capital volatility from interest rate and FX movements. Overall, while the recurring earnings base is solid and cash quality high, dependence on one-off gains and heavy interest burden affect the sustainability of net income.
For FY2027 (year ending March 2027) the full-year forecast is revenue ¥957.0B (YoY +9.2%), operating income ¥113.0B (YoY +36.5%), profit attributable to owners of parent ¥34.0B (YoY +2.8%), and EPS ¥37.61 (prior year ¥36.59). The operating stage is expected to deliver double-digit operating income growth driven by asset additions and continued cost management, but final profit growth is expected to be limited by structural interest and tax burdens. The full-year operating income target is at a progress rate of 73.3% as of the first half (first half ¥82.8B), implying the remaining ¥30.2B in the second half is achievable. Final profit progress is high at 97.4% (first half ¥33.1B / full year ¥34.0B), suggesting little change in the second half. Dividends are forecast at ¥0 at year-end, continuing no dividend policy while prioritizing internal reserves and debt repayment. Achievement certainty is high on the operating front but interest rate movements and tax burden variability are key drivers of final profit variability.
No interim dividend and no year-end dividend were paid this fiscal year, continuing a no-dividend policy; payout ratio is 0%. Share buybacks of ¥0.8B were executed, making total return ratio (dividends + buybacks) approximately 2.4%, at a very low level. Although FCF is positive at ¥165.6B and there is dividend capacity, with interest-bearing debt of ¥3,321B, D/E 2.29x, and Debt/EBITDA 12.7x in a high-leverage environment, prioritizing internal reserve retention and debt reduction as capital allocation is reasonable. The FY2027 forecast also maintains a year-end dividend of ¥0, continuing a focus on strengthening the balance sheet rather than shareholder returns. In the medium term, if Debt/EBITDA improves to below 10x and equity ratio rises above 25%, the company could have room to commence dividend payments.
High leverage and interest burden risk: With interest-bearing debt of ¥3,321B, D/E 2.29x, and Debt/EBITDA 12.7x, leverage remains high and finance costs of ¥72.4B versus EBIT ¥82.8B yield interest coverage of about 1.1x, which is highly fragile. In a rising-rate environment, increased interest burden could compress net income and reduce financial flexibility. Short-term liabilities of ¥315B are covered by cash ¥231B and restricted deposits ¥627B, preserving near-term liquidity, but the limited freedom of restricted deposits should be noted.
Heavy tax burden and suppression of net profit margin: Effective tax burden at 78.8% (prior year 11.8%) is extremely high; against profit before tax ¥58.6B, net income is ¥46.2B (profit attributable to owners of parent ¥33.1B), keeping net margin at 3.8%. Deferred tax liabilities increased to ¥551.3B (prior year ¥324.4B), and timing differences in future recognition of gains/losses could materially affect equity. Tax law changes or timing of reversals of valuation differences could cause significant net income volatility.
Customer/demand concentration and grid constraint risk: Renewable energy generation and related businesses account for 98.6% of revenue, with power sales concentrated to five major counterparties (Tohoku Electric Power Network, NTT Anode Energy, Kyushu Electric Power Transmission & Distribution, Shikoku Electric Power Transmission & Distribution, Chubu Electric Power Grid). While demand is stable, deterioration in the financial condition of T&D utilities, grid constraints, or increased frequency/duration of output curtailments could reduce generation volumes and revenue. Review of FIT/FIP schemes leading to price declines, and rises in fuel (biomass) costs or FX-driven fuel cost increases could also compress margins.
Profitability & Returns
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Return on Equity | 3.1% | 8.0% (2.9%–10.0%) | -4.9pt |
| Operating Margin | 9.5% | 19.9% (6.5%–38.3%) | -10.5pt |
| Net Margin | 5.3% | 5.6% (3.8%–22.2%) | -0.4pt |
Profitability is below the industry median, with operating margin -10.5pt and ROE -4.9pt indicating significant room for improvement. Net margin is near the median, with interest and tax burdens weighing on profitability.
Growth & Capital Efficiency
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Revenue Growth Rate (YoY) | 24.7% | -0.5% (-0.9%–13.1%) | +25.2pt |
Revenue growth outperformed the industry median by +25.2pt, with asset additions and business expansion standing out within the industry.
※Source: Company compilation
Improvement to operating margin of 9.5% and maintenance of EBITDA margin at 29.8% demonstrate the stabilization of operations and cost management in renewable energy generation and related businesses, confirming strengthened underlying earnings power. However, finance costs of ¥72.4B, interest coverage of about 1.1x, and an effective tax burden of 78.8% sustain a structure that suppresses final net margin growth to 3.8%; correcting high leverage (Debt/EBITDA 12.7x) is key to medium-term capital efficiency improvement.
Operating Cash Flow ¥282.7B and Free Cash Flow ¥165.6B reflect sustained strong cash generation, and restrained investment (CapEx ¥54.2B; CapEx/Depreciation 0.30x) supports near-term FCF. Current ratio 218% indicates good short-term liquidity, but the existence of restricted deposits ¥627B and restrained capital spending pose risks of underinvestment for medium-term growth. The FY2027 forecast expects operating income to increase +36.5% while net income only +2.8%, reflecting structural constraints from interest and tax burdens. Continued no-dividend policy and total return of 2.4% reflect prioritization of financial discipline under high leverage; progress on improving Debt/EBITDA to below 10x and equity ratio above 25% would be prerequisites for initiating shareholder distributions.
This report is an automatically generated earnings analysis document produced by AI analyzing XBRL earnings release data. It does not constitute a recommendation to invest in any specific security. Industry benchmarks are compiled by the company based on publicly disclosed financial statements and are for reference only. Investment decisions should be made at your own responsibility; consult professionals as necessary.