Recognition of a ¥941 million non-operating expense (loss on valuation of forward foreign exchange contracts) in the financial results for the second quarter (interim period) of the fiscal year ending March 2027
OKUMURA CORPORATION and its consolidated subsidiary, 石狩バイオエナジー合同会社
Power generation facility of 石狩バイオエナジー合同会社 and long-term forward foreign exchange contracts related to fuel procurement transactions during the operating period
An explosion occurred at a power generation facility of 石狩バイオエナジー合同会社 on 19 July 2024, and the company ceased applying hedge accounting from the second quarter of the fiscal year ended March 2025 onward because the requirements for hedge accounting were no longer met. As a result, gains and losses from the fair-value valuation of outstanding forward foreign exchange contracts are recognized as non-operating expenses or non-operating income.
¥941 million (non-operating expenses in the consolidated income statement)
Second quarter (interim period) of the fiscal year ending March 2027
Although the consolidated earnings forecasts for the fiscal year ending March 2027 have been revised, they do not incorporate gains or losses on the valuation of forward foreign exchange contracts recognized by 石狩バイオエナジー合同会社. Going forward, consolidated results may be significantly affected by trends in foreign exchange rates and other factors.
Going forward, the Company's consolidated results may be significantly affected by trends in foreign exchange rates and other factors.
| Item | Details |
|---|---|
| Event name | Recognition of a ¥941 million non-operating expense (loss on valuation of forward foreign exchange contracts) in the financial results for the second quarter (interim period) of the fiscal year ending March 2027 |
| Subject Entity | OKUMURA CORPORATION and its consolidated subsidiary, 石狩バイオエナジー合同会社 |
| Target Locations / Products | Power generation facility of 石狩バイオエナジー合同会社 and long-term forward foreign exchange contracts related to fuel procurement transactions during the operating period |
| Cause | An explosion occurred at a power generation facility of 石狩バイオエナジー合同会社 on 19 July 2024, and the company ceased applying hedge accounting from the second quarter of the fiscal year ended March 2025 onward because the requirements for hedge accounting were no longer met. As a result, gains and losses from the fair-value valuation of outstanding forward foreign exchange contracts are recognized as non-operating expenses or non-operating income. |
| Amount of Impact on Business Performance | ¥941 million (non-operating expenses in the consolidated income statement) |
| Accounting period in which recognized | Second quarter (interim period) of the fiscal year ending March 2027 |
| Impact on Earnings Forecast | Although the consolidated earnings forecasts for the fiscal year ending March 2027 have been revised, they do not incorporate gains or losses on the valuation of forward foreign exchange contracts recognized by 石狩バイオエナジー合同会社. Going forward, consolidated results may be significantly affected by trends in foreign exchange rates and other factors. |
| Outlook | Going forward, the Company's consolidated results may be significantly affected by trends in foreign exchange rates and other factors. |
Items this document does not state (17)
These are items the company does not state in this document. We do not leave them blank, nor fill them in from other sources or by inference.
The reasons the company gives
The company's own explanation, not something inferred from the numbers.An explosion occurred at a power generation facility of 石狩バイオエナジー合同会社 on 19 July 2024, causing the company to cease applying hedge accounting to its forward foreign exchange contracts from the second quarter of the fiscal year ended March 2025 onward because the requirements for hedge accounting were no longer met. As a result, gains and losses from the fair-value valuation of outstanding forward foreign exchange contracts are recognized as non-operating expenses or non-operating income.