RENOVA,Inc. FY2026 Q2 Earnings Report

Financial Highlights

• Net Sales: ¥40.61B
• Operating Income: ¥4.89B
• Net Income: ¥233M
• EPS: ¥36.74

Income Statement

Balance Sheet

Cash Flow Statement

Profitability Ratios

Year-over-Year Comparison

Share Information

Dividend Information

Full Year Forecast

Disclaimer

This data was automatically extracted from XBRL files. Please refer to the original disclosure documents for accuracy.

AI Financial Analysis

Executive Summary

RENOVA (9519) delivered strong top-line and operating momentum in FY2026 Q2 under IFRS, with revenue of 406.09 and operating income of 48.88, up 20.5% and 127.1% YoY, respectively. Despite the sharp operating rebound, net income was 33.23, down 44.2% YoY, implying non-operating headwinds or prior-year one-offs; tax expense was minimal (0.38, 0.8% effective rate), suggesting loss carryforwards or tax credits. DuPont analysis indicates a calculated ROE of 2.3%, driven by an 8.2% net margin, low asset turnover of 0.073 (asset-heavy power assets), and high financial leverage of 3.86x. EBITDA of 130.36 and D&A of 81.48 are consistent with a capital-intensive renewables model, with an estimated operating margin of roughly 12.0% (48.88/406.09). Cash generation was a bright spot: operating cash flow (OCF) was 199.02 (5.99x net income), and free cash flow (FCF) was 150.29 (OCF + investing CF), indicating earnings quality backed by strong non-cash charges and/or working capital inflows. The balance sheet shows total assets of 5,563.98 and total liabilities of 3,966.27, for reported equity of 1,441.57; the reported equity ratio is 16.7%, pointing to a leveraged capital structure common in project-financed renewables. Debt-to-equity is 2.75x (liabilities/equity), underscoring sensitivity to financing conditions and refinancing risk. Liquidity metrics such as the current ratio are unreported, but cash and equivalents were 239.27 at period-end, providing some cushion, though current liabilities are not disclosed. Working capital is listed as 1,107.58, equal to current assets, which suggests current liabilities data were not available; this limits short-term liquidity interpretation. EPS was 36.74 (basic) on average shares of 90.43 million, while book value per share shows a discrepancy between a calculated 1,594.91 JPY and XBRL 1,031.01 JPY; we rely on the reported equity ratio for leverage framing and acknowledge measurement differences. Strategically, the results suggest improving plant availability/output and cost discipline, with operating leverage magnifying revenue gains into earnings. However, the YoY decline in net income implies non-operating volatility (e.g., valuation movements, FX, derivative fair values, or equity-method swings), as ordinary income was unreported. Investment outlays (capex of 39.37 and total investing CF of -48.73) were manageable against robust OCF, leaving FCF firmly positive and financing CF modestly negative (-20.34), including share repurchases of -4.87. The very low effective tax rate boosted after-tax earnings in the quarter; normalization in future periods could dampen net income optics. Overall profitability is trending up at the operating level, cash flow quality is solid, and leverage remains elevated but typical for the sector; data gaps around interest expense and current liabilities constrain a full solvency and liquidity appraisal. Outlook hinges on sustained generation, power price/pass-through structures, project pipeline execution, and refinancing conditions.

Profitability Analysis

ROE_decomposition: ROE 2.3% = Net margin 8.2% × Asset turnover 0.073 × Financial leverage 3.86x (per provided DuPont). The low turnover reflects an asset-heavy IPP model, while leverage amplifies returns. Net margin is supported by low taxes and improved operating performance. margin_quality: Operating income 48.88 on revenue 406.09 implies ~12.0% operating margin. EBITDA margin is 32.1% (EBITDA 130.36), consistent with long-lived infrastructure with high D&A (81.48). Net margin of 8.2% benefited from a 0.8% effective tax rate; sustainability of this rate is uncertain. operating_leverage: Revenue +20.5% YoY translated into operating income +127.1% YoY, indicating high operating leverage as fixed costs are diluted. D&A remains substantial, so incremental revenue has strong flow-through to EBIT, but non-operating items tempered bottom-line growth.

Growth Assessment

revenue_sustainability: Revenue reached 406.09 (+20.5% YoY), likely driven by higher output/capacity, improved availability, or price mechanisms. Sustainability depends on plant uptime, resource conditions, and any merchant exposure vs. contracted PPAs/FiT. profit_quality: EBITDA growth and positive OCF signal improving core earnings quality. The drop in net income despite stronger operations suggests non-operating volatility; equity-method income (4.46) is positive, but other non-operating lines were unreported. outlook: With asset additions modest (capex 39.37) and FCF robust (150.29), near-term growth may center on optimizing existing assets while preparing pipeline projects. Watch for commissioning schedules, power price trends, and policy changes affecting tariffs or grid access.

Financial Health

liquidity: Cash and equivalents were 239.27. Current assets were 1,107.58, but current liabilities were unreported, so current and quick ratios cannot be assessed. Working capital was listed as 1,107.58 (likely equals current assets due to missing current liabilities), so short-term liquidity assessment is constrained. solvency: Total liabilities of 3,966.27 vs. total equity of 1,441.57 yield a debt-to-equity (liabilities/equity) of 2.75x. The reported equity ratio is 16.7%, indicating leveraged financing common to project finance. Interest coverage is not calculable due to unreported interest expense. capital_structure: Asset base totals 5,563.98, predominantly noncurrent (4,192.93). Leverage and project-level debt likely dominate financing, with sensitivity to refinancing costs and interest rates. BVPS shows discrepancies between calculated and XBRL figures; we defer to reported equity ratio for leverage framing.

Cash Flow Quality

earnings_quality: OCF of 199.02 vs. net income of 33.23 (OCF/NI 5.99x) indicates strong cash conversion, supported by non-cash D&A (81.48) and probable working capital inflows. Low cash taxes enhance OCF in the period. FCF_analysis: FCF was 150.29 (OCF 199.02 + investing CF -48.73). Capex was 39.37, implying additional investing items beyond capex (e.g., investments or asset acquisitions/disposals). Positive FCF alongside rising EBITDA suggests funding capacity for pipeline and selective de-leveraging. working_capital: Accounts receivable were 147.27; inventories 23.77. Current liabilities unreported; thus, net working capital movements cannot be fully dissected. Reported OCF strength implies either receivables collection efficiency or other WC tailwinds.

Dividend Sustainability

payout_ratio_assessment: Dividend data (DPS, total dividends, payout) were unreported; therefore, payout ratio cannot be calculated. Given a capital-intensive growth model and leverage, internal reinvestment is typically prioritized. FCF_coverage: With FCF of 150.29 and share repurchases of -4.87, internal cash generation appears more than sufficient to cover modest shareholder returns. Absence of dividend figures prevents a definitive coverage analysis. policy_outlook: Under an IPP/project finance model, dividend capacity often hinges on project cash sweeps and covenants. Without disclosed dividend policy and interest burden, we assume a conservative stance pending clearer guidance.

Risk Assessment

Business Risks:

• Power price volatility and merchant exposure where PPAs/FiT coverage is partial
• Resource variability affecting capacity factors (solar irradiance, wind conditions)
• Project execution risk (permitting, EPC delays, cost inflation)
• Regulatory and tariff changes impacting renewable incentives and grid access
• Counterparty risk with offtakers and EPC/O&M partners
• Concentration risk if revenue depends on a limited set of operating assets

Financial Risks:

• High leverage (debt-to-equity 2.75x) and low reported equity ratio (16.7%)
• Refinancing and interest rate risk amid rising funding costs
• Interest coverage not disclosed; sensitivity to debt service capacity
• Potential volatility from non-operating items (derivatives, FX, fair value)
• Tax normalization risk given a very low effective tax rate (0.8%) this period

Key Concerns:

• Unreported current liabilities obscure near-term liquidity profile
• Discrepancy between calculated and XBRL BVPS and equity ratio metrics
• Net income decline YoY despite stronger operations suggests non-operating drag
• Sustainability of elevated OCF versus NI gap if working capital timing reverses

Investment Implications

Key Takeaways:

• Solid operating rebound: operating income +127.1% YoY on revenue +20.5%
• Strong cash generation: OCF 199.02, FCF 150.29, OCF/NI 5.99x
• High fixed-asset base with EBITDA margin 32.1% and D&A 81.48
• Leverage elevated: debt-to-equity 2.75x; reported equity ratio 16.7%
• Net income down 44.2% YoY, highlighting non-operating volatility
• Effective tax rate unusually low at 0.8%, may normalize upward

Metrics to Watch:

• Plant availability and capacity factors by asset
• Power price realization and share of contracted vs. merchant volumes
• Net debt and interest expense; interest coverage and refinancing schedule
• OCF sustainability and working capital movements
• Capex pipeline, committed projects, and COD timeline
• Equity ratio trend and covenant headroom
• EBITDA growth versus changes in non-operating items

Relative Positioning: Within Japan’s renewable IPP peer set, RENOVA shows improving operating profitability and superior near-term cash generation, offset by higher leverage and greater sensitivity to financing and non-operating items; overall positioning is typical of project-financed operators with meaningful operating leverage and execution dependence on the pipeline.

Disclaimer

This analysis was auto-generated by AI. Please note the following:

• No Guarantee of Accuracy: The accuracy and completeness of this analysis are not guaranteed. For accurate financial data, please refer to the original disclosure documents published on TDnet or other official sources
• Not Investment Advice: This analysis is for general informational purposes only and does not constitute investment advice under applicable securities laws. It is not a recommendation to buy or sell any specific securities
• At Your Own Risk: Investment decisions should be made at your own discretion and risk. We assume no liability for any losses incurred based on this analysis