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Financial results presentation5074TESS Holdings Co.,Ltd.Construction and Materials

Financial Results Briefing Materials for the Third Quarter of the Fiscal Year Ending June 2026

For the cumulative third quarter of the fiscal year ending June 2026, revenue and operating profit exceeded the year-earlier period, driven by growth in battery storage EPC and strong performance in renewable power generation and electricity retailing. The full-year forecasts remain unchanged. Operating profit has reached 99.8% of the plan, while quarterly net income attributable to owners of the parent has reached 105.3%.

Worth reading
62In focus
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Direction
Improvement
Direction inferred from the company’s description.
Scale
10656
¥ million (year-on-year increase in revenue)
Wording
Conditional
How definitive the wording is.

Contents of this document

Financial results presentationThird quarter of the fiscal year ending June 202612 items taken from the company’s own explanation
Financial Results Figures (The key points of this material are explained below)
Net Sales¥37,444 million+39.8%
Operating profit¥3,592 million+34.6%
Ordinary income¥2,497 million
Net income¥1,263 million +105.0%profit attributable to owners of the parent
Selling, general and administrative expenses¥3,745 million
Operating profit margin
Rate9.6%
Year-on-year change (points)Down from 10.0% in the year-earlier period (the materials do not specify the change in percentage points)
Results for the three months of the current quarter
Net Sales¥10,401 million
Gross profit¥1,545 million
Operating profit¥320 million
Full-year earnings forecast
Net Sales
¥47,000 million
Gross profit
¥9,000 million
Operating profit
¥3,600 million
Ordinary income
¥1,800 million
Profit attributable to owners of the parent
¥1,200 million
ROE
2.8 %
ROIC
1.7 %
Dividend per share
¥5.8
Progress against full-year forecast　通期の予想に対して、いまどこまで進んだかの割合です。
Net Sales79.7%
Gross profit81.5%
Operating profit99.8%
Ordinary income138.7%
Profit attributable to owners of the parent105.3%
What the company explained in this material
Key points of the Q&AKey questions raised by investors at the briefing and the company's answers
  1. Battery storage EPC orders are expected across a broad timeframe, from the fiscal year ending June 2027 through projects scheduled for completion in 2028
  2. Revenue from battery storage EPC is recognized based on construction progress, with progress tending to advance substantially when major equipment is installed
  3. The company is collaborating with Sustech on an FIP conversion and co-located battery storage model
  4. The company has formed a partnership with Buddynet to structure battery storage facility development projects and build a construction framework
  5. The company is addressing cost increases by confirming purchase prices, booking foreign exchange forwards, conducting futures transactions, and incorporating price increases into its decisions on accepting orders
Breakdown of Factors Affecting the ChangeReasons cited by the Company for the change in the figures.
  • Lower derivative valuation losses (hedge accounting applied)¥1,695 million
  • Decline in the one-off gain on investments in a silent partnership resulting from the consolidation of みやこ¥-328 million
  • Foreign Exchange Effects¥379 million
  • Unprofitable biomass EPC projects (renewable energy contracting)¥-349 million
  • Increase in shareholder benefit program expenses¥-93 million
  • Increase in personnel expenses¥-188 million
  • Other¥-351 million
New initiatives
  • Collaboration with Sustech on an FIP conversion and co-located battery storage model
  • Business partnership with Buddynet for battery storage facility development
  • Construction of an EFB pellet manufacturing plant in Indonesia
  • Introduction of a restricted stock compensation program for employees
  • Formulation and publication of a Partnership Building Declaration
Key KPIsA metric the company considers important as a management benchmark.
  • ROE2.7 %
  • ROIC1.7 %
  • Orders received¥38,729 million
    Year on year against the same period last year+228.9%
  • Order backlog¥45,163 million
    Year on year against the same period last year+204.1%
  • Total renewable power generation capacity410.4 MW
  • Capacity commencing supply under on-site PPAs9.9 MW
  • Cumulative contracted capacity (grid-scale battery storage facilities)370.8 MW
  • Cumulative contracted capacity (battery storage facilities other than grid-scale facilities)84.6 MW
Segment results
Engineering Business
Net Sales16,442
Revenue unit¥ million
Gross profit2,656
Gross profit unit¥ million
Year on year against the same period last yearBoth revenue and gross profit increased
Energy Supply Business
Net Sales21,001
Revenue unit¥ million
Gross profit4,681
Gross profit unit¥ million
Year on year against the same period last yearBoth revenue and gross profit increased
Medium-term management plan targets
Fiscal year ending June 2030
Gross profit¥215 100 million ROE and ROIC: %
Operating profit¥134 100 million ROE and ROIC: %
ROE¥11.7 100 million ROE and ROIC: %
ROIC¥5.7 100 million ROE and ROIC: %
Fiscal year ending June 2027
Gross profit¥132 100 million ROE and ROIC: %
Operating profit¥64 100 million ROE and ROIC: %
ROE¥5.8 100 million ROE and ROIC: %
ROIC¥3 100 million ROE and ROIC: %
Financial targets
ROE
Target for the fiscal year ending June 203011.7 %
Target for the fiscal year ending June 20275.8 %
Actual results for the fiscal year ended June 20250.5 %
ROIC
Target for the fiscal year ending June 20305.7 %
Target for the fiscal year ending June 20273 %
Actual results for the fiscal year ended June 20251.4 %
Orders received and order backlog
Orders received
¥38,729 million
Order backlog
¥45,163 million
Number of employees
Change during the periodIncrease of 64 people year on year
Annual Dividend
Annual dividend per share¥5.8
Payout ratio
Approximately 30%
Gross profit
Rate19.6%
Year-on-year change (points)Down from 23.2% in the year-earlier period (the materials do not specify the change in percentage points)
Contents of this document
ItemDetails
Document typeFinancial results presentation
Fiscal Period CoveredThird quarter of the fiscal year ending June 2026
Net Sales¥37,444 million (YoY +39.8%)
Operating profit¥3,592 million (YoY +34.6%)
Ordinary income¥2,497 million
Net income¥1,263 million (profit attributable to owners of the parent) (YoY +105.0%)
Gross profitRate 19.6% / Year-on-year change (points) Down from 23.2% in the year-earlier period (the materials do not specify the change in percentage points)
Operating profit marginRate 9.6% / Year-on-year change (points) Down from 10.0% in the year-earlier period (the materials do not specify the change in percentage points)
Selling, general and administrative expenses¥3,745 million
Results for the three months of the current quarterNet Sales ¥10,401 million / Gross profit ¥1,545 million / Operating profit ¥320 million
Full-year earnings forecastNet Sales ¥47,000 million / Gross profit ¥9,000 million / Operating profit ¥3,600 million / Ordinary income ¥1,800 million / Profit attributable to owners of the parent ¥1,200 million / ROE 2.8 % / ROIC 1.7 % / Dividend per share ¥5.8
Progress against full-year forecastNet Sales 79.7% / Gross profit 81.5% / Operating profit 99.8% / Ordinary income 138.7% / Profit attributable to owners of the parent 105.3%
Segment resultsEngineering Business Net Sales 16,442 / Revenue unit ¥ million / Gross profit 2,656 / Gross profit unit ¥ million / Year on year against the same period last year Both revenue and gross profit increased / Energy Supply Business Net Sales 21,001 / Revenue unit ¥ million / Gross profit 4,681 / Gross profit unit ¥ million / Year on year against the same period last year Both revenue and gross profit increased
Breakdown of Factors Affecting the ChangeFactors Lower derivative valuation losses (hedge accounting applied) / Amount ¥1,695 million, Factors Decline in the one-off gain on investments in a silent partnership resulting from the consolidation of みやこ / Amount ¥-328 million, Factors Foreign Exchange Effects / Amount ¥379 million, Factors Unprofitable biomass EPC projects (renewable energy contracting) / Amount ¥-349 million, Factors Increase in shareholder benefit program expenses / Amount ¥-93 million, Factors Increase in personnel expenses / Amount ¥-188 million, Factors Other / Amount ¥-351 million
Key KPIsIndicator name ROE / Value 2.7 % / Year on year against the same period last year Not disclosed, Indicator name ROIC / Value 1.7 % / Year on year against the same period last year Not disclosed, Indicator name Orders received / Value ¥38,729 million / Year on year against the same period last year ¥228.9 million, Indicator name Order backlog / Value ¥45,163 million / Year on year against the same period last year ¥204.1 million, Indicator name Total renewable power generation capacity / Value 410.4 MW / Year on year against the same period last year Not disclosed, Indicator name Capacity commencing supply under on-site PPAs / Value 9.9 MW / Year on year against the same period last year Not disclosed, Indicator name Cumulative contracted capacity (grid-scale battery storage facilities) / Value 370.8 MW / Year on year against the same period last year Not disclosed, Indicator name Cumulative contracted capacity (battery storage facilities other than grid-scale facilities) / Value 84.6 MW / Year on year against the same period last year Not disclosed
Number of employeesNumber of Employees Not disclosed / Change during the period Increase of 64 people year on year
Medium-term management plan targetsFiscal year ending June 2030 Gross profit ¥215 100 million (ROE and ROIC: %) / Operating profit ¥134 100 million (ROE and ROIC: %) / ROE ¥11.7 100 million (ROE and ROIC: %) / ROIC ¥5.7 100 million (ROE and ROIC: %) / Fiscal year ending June 2027 Gross profit ¥132 100 million (ROE and ROIC: %) / Operating profit ¥64 100 million (ROE and ROIC: %) / ROE ¥5.8 100 million (ROE and ROIC: %) / ROIC ¥3 100 million (ROE and ROIC: %)
Financial targetsROE Target for the fiscal year ending June 2030 11.7 % / Target for the fiscal year ending June 2027 5.8 % / Actual results for the fiscal year ended June 2025 0.5 % / ROIC Target for the fiscal year ending June 2030 5.7 % / Target for the fiscal year ending June 2027 3 % / Actual results for the fiscal year ended June 2025 1.4 %
Annual DividendAnnual dividend per share ¥5.8 / Interim and Year-End Breakdown Not disclosed
Payout ratioApproximately 30%
Orders received and order backlogOrders received ¥38,729 million / Order backlog ¥45,163 million
Key points of the Q&ABattery storage EPC orders are expected across a broad timeframe, from the fiscal year ending June 2027 through projects scheduled for completion in 2028, Revenue from battery storage EPC is recognized based on construction progress, with progress tending to advance substantially when major equipment is installed, The company is collaborating with Sustech on an FIP conversion and co-located battery storage model, The company has formed a partnership with Buddynet to structure battery storage facility development projects and build a construction framework, The company is addressing cost increases by confirming purchase prices, booking foreign exchange forwards, conducting futures transactions, and incorporating price increases into its decisions on accepting orders
New initiativesCollaboration with Sustech on an FIP conversion and co-located battery storage model, Business partnership with Buddynet for battery storage facility development, Construction of an EFB pellet manufacturing plant in Indonesia, Introduction of a restricted stock compensation program for employees, Formulation and publication of a Partnership Building Declaration
Items this document does not state (8)
Self-assessment against the planUnit price and quantity metricsNumber of stores and locationsAssumptions Underlying the Business OutlookRisk amount incorporated into the outlookAcquisition of treasury sharesCapital expendituresMarket Size / Share

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.

The increases in revenue and profit were attributable to growth in battery storage system projects within renewable energy EPC, higher electricity sales revenue from renewable power generation, and strong electricity retail supply. The substantial increase in ordinary profit was mainly due to the decline in derivative valuation losses recognized in the year-earlier period.

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Financial Results Briefing Materials for the Third Quarter of the Fiscal Year Ending June 2026 | TESS Holdings Co.,Ltd. (5074) timely disclosure | Komori