Capital expenditure restraint, shift to replacement demand and intensifying order competition

「In the power and telecommunications sectors, the introduction of new equipment and replacement work by electric utilities are trending lower, but replacement of deteriorated utility poles under the revenue cap system is generally progressing as planned.」

「当社の主要な取引先である電力業界では、データセンター等の新増設の影響もあって、電力需要は見込まれるものの、人件費や材料費の高騰により自発工事は圧縮傾向となっています。」

「The power industry, a major customer of the Company, is at the midpoint of the first regulatory period under the revenue cap system. However, power demand is expected to increase going forward, partly due to the construction and expansion of data centers and semiconductor plants.」

「光建設工事への投資は低調であったものの、支障移転工事や保守が中心となり平準化した状況になりました。」

「In the power and communications businesses, shipments of related products were strong as renewal work on jointly used utility poles progressed as planned. However, the volume of work ahead is difficult to forecast, partly due to the impact of higher prices.」

「In the power-related business, replacement of deteriorated utility poles and renewal work on deteriorated facilities performed well. In communications, although investment in optical-network construction was sluggish, shipments were maintained through relocation work necessitated by infrastructure obstructions, maintenance and work associated with the replacement of jointly used utility poles.」

「In the steel tower and structural steel businesses, demand for replacement remains. However, the large projects anticipated were postponed due to construction delays, partly reflecting the impact of the 2024 Noto Peninsula Earthquake, resulting in performance below the initial outlook.」

「In the steel tower and structural steel businesses, demand for replacement of transmission towers due to aging remains. Although order weight increased from the previous year, sales did not increase as much as planned.」

「In communications, activity was centered on relocation work necessitated by infrastructure obstructions and maintenance, while the low level of new optical-network construction continued. In the steel tower and structural steel businesses, demand for replacement of transmission towers due to aging remains. Although order volume increased from the previous year, it did not increase as much as initially expected.」

「In communications, activity was centered on relocation work necessitated by infrastructure obstructions and maintenance, while the low level of new optical-network construction continued. In the steel tower and structural steel businesses, although demand for replacement of transmission towers due to aging remains, order volume did not increase as much as initially expected.」

「In the power and communications businesses, sales volume tracked as planned, while sales and profit both increased, partly due to the impact of passing higher costs through to prices. In the steel tower and structural steel businesses, demand for replacement remains, and order volume was broadly in line with plan. As a result, sales rose ¥251 million, or 29.8%, year on year to ¥1,095 million, while segment profit rose ¥42 million, or 31.6%, year on year to ¥176 million.」

「In the power-related business, replacement work on deteriorated utility poles, transformer replacement and other renewal work on supporting structures was substantial, allowing operations to proceed as planned. In the telecommunications-related business, sales declined from the previous fiscal year as activity under the Advanced Wireless Environment Development Promotion Project subsided, while profit increased as the company continued to pass higher material costs through to selling prices.」

「In the power and telecommunications businesses, construction to address aging equipment and utility-pole replacement work remained firm, but sales declined from the previous fiscal year as activity under the Advanced Wireless Environment Development Promotion Project subsided. Meanwhile, profit increased from the previous fiscal year as the company continued to pass higher material costs through to selling prices. In towers and steel structures, although replacement demand for aging transmission towers remained, order volumes did not reach the previous year's level, and orders for towers serving private-sector demand also failed to grow as much as initially expected, resulting in declines in both sales and profit. As a result, sales were ¥2,879 million, down ¥193 million, or 6.3%, year on year, while segment profit was ¥380 million, up ¥11 million, or 3.0%.」

「In the power-related business, construction to address aging equipment and utility-pole replacement work remained firm, but sales declined from the previous fiscal year as activity under the Advanced Wireless Environment Development Promotion Project subsided. In towers and steel structures, although replacement demand for aging transmission towers remained, order volumes did not reach the previous year's level, and orders for towers for private-sector demand also failed to grow as much as initially expected, resulting in declines in both sales and profit.」

「In the power industry, there was considerable self-initiated construction work around utility poles, but sales declined owing to slower progress on construction in the telecommunications industry. In towers and steel structures, the volume of tower-related orders for private-sector demand did not increase, and sales were only slightly higher than in the previous fiscal year. As a result, sales were ¥844 million, down ¥64 million, or 7.1%, year on year, while segment profit was ¥134 million, up ¥30 million, or 29.0%, partly owing to the effects of passing higher costs through to selling prices.」

「In the power industry, although budgets for distribution work tended to be reduced, replacement work on aging equipment enabled demand for overhead line hardware to remain firm. In the telecommunications industry, demand for some products increased as capital expenditure rose under the Advanced Wireless Environment Promotion Project. In towers and steel structures, although replacement demand for aging transmission towers remained, sales declined as private-sector demand fell owing to restrained capital expenditure.」

「In the power industry, although budgets for distribution work tended to be reduced, replacement work on aging equipment enabled the company to post sales close to the original plan in the second quarter under review. In the telecommunications industry, demand for some products increased as capital expenditure rose under the Advanced Wireless Environment Development Promotion Project. In towers and steel structures, although replacement demand for aging transmission towers remained, orders were more selective than in the previous fiscal year, resulting in declines in both sales and profit. As a result, sales were ¥2,035 million, down ¥37 million, or 1.8%, year on year, and segment profit was ¥256 million, down ¥41 million, or 14.0%.」

「In the power industry, demand for overhead line hardware remained weak as the trend toward reducing budgets for distribution work continued. Meanwhile, demand for some products increased in the telecommunications industry as capital expenditure rose under the Advanced Wireless Environment Development Promotion Project. In towers and steel structures, orders were more selective than in the previous fiscal year owing to the impact of cost reductions, despite replacement demand, resulting in declines in both sales and profit.」

「Because the power industry supports essential lifelines, the direct impact of COVID-19 has been limited. However, if the spread of infection is prolonged, there is concern that investment budgets may trend lower owing to effects such as a decline in electricity consumption by major users. Capital expenditure in the telecommunications industry is also being restrained, but demand for maintenance and relocation work necessitated by obstacles is expected to remain largely unchanged.」

「The power and telecommunications industries are important businesses supporting lifelines. Accordingly, the company's principal product, overhead line hardware, must be supplied stably and continuously, and the direct impact of COVID-19 has been limited. Private-sector demand remains difficult, however, because there are few projects and owing to personnel-related factors. In towers and steel structures, sales increased owing to higher replacement demand for aging transmission towers. As a result, sales were ¥3,156 million, down ¥14 million, or 0.5%, year on year, and segment profit was ¥467 million, down ¥13 million, or 2.7%.」

「The power and telecommunications industries are important businesses supporting lifelines, so the company's principal product, overhead line hardware, must be supplied stably and continuously, and the impact of COVID-19 has been limited. Private-sector demand, however, has been difficult owing to the postponement of projects and personnel-related factors. In towers and steel structures, replacement demand for aging transmission towers increased, resulting in higher sales and profit. As a result, sales were ¥2,073 million, down ¥69 million, or 3.2%, year on year, and segment profit was ¥297 million, down ¥18 million, or 6.0%.」

「In the telecommunications industry, the tendency to restrain capital expenditure continued, and demand for overhead line hardware remained weak. In towers and steel structures, sales and profit both increased as construction of new towers progressed steadily. As a result, sales were ¥976 million, up ¥42 million, or 4.6%, year on year, and segment profit was ¥124 million, up ¥9 million, or 8.2%.」

「In the power and telecommunications segment, the power industry advanced energy conservation initiatives and power system reform through the legal separation of the power generation and transmission businesses, while comprehensive reviews of materials procurement and reductions in repair expenses led to a decline in transaction volumes. In the telecommunications industry, capital expenditure continued to be restrained, and demand for overhead line hardware remained weak. Meanwhile, in towers and steel structures, sales and profit both increased owing to higher replacement demand for aging towers and strong performance in transmission tower trunk-line design services. As a result, sales were ¥4,218 million, up ¥158 million, or 3.9%, from the previous fiscal year, and segment profit was ¥593 million, up ¥86 million, or 17.0%.」

「In the power and telecommunications segment, the power industry is preparing for the legal separation of the power generation and transmission businesses in 2020, while efforts to promote energy conservation and reform the power system have led to a comprehensive review of materials procurement and reductions in repair expenses, resulting in declines in both selling prices and volumes. In the telecommunications industry, capital expenditure continues to be restrained, and demand for overhead line hardware remains weak. Meanwhile, sales and profit in towers and steel structures increased owing to the expansion of replacement work on aging transmission towers.」

「In the telecommunications industry, capital expenditure continues to be restrained, and demand for overhead line hardware remains weak. Meanwhile, in towers and steel structures, sales and profit are increasing as replacement work on aging transmission towers expands.」

「In the telecommunications industry, restraint on capital expenditure continues, and demand for overhead line hardware remains weak. In towers and steel structures, both sales and profit increased owing to orders for tower design in addition to new towers. As a result, sales were ¥933 million, down ¥35 million, or 3.7%, year on year, while segment profit was ¥115 million, broadly unchanged from the previous year.」

「The telecommunications industry continues to restrain capital expenditure overall, while construction volumes are declining and competition for orders is intensifying.」

「In the power and telecommunications segment, the power industry carried out a comprehensive review of materials procurement and reduced repair expenses amid efforts to promote energy conservation and reform the power system, resulting in declines in both selling prices and volumes. In the telecommunications industry, demand for overhead line hardware remained weak as capital expenditure continued to be restrained. Although the number of new towers was high in towers and steel structures, they were relatively light and therefore not highly profitable, resulting in declines in both sales and profit for the segment. As a result, sales were ¥3,026 million, down ¥119 million, or 3.8%, year on year, and segment profit was ¥354 million, down ¥121 million, or 25.5%.」

「In the power and telecommunications segment, the power industry carried out a comprehensive review of materials procurement and reduced repair expenses amid efforts to promote energy conservation and reform the power system, resulting in declines in both selling prices and volumes. In the telecommunications industry, demand for overhead line hardware remained weak as capital expenditure continued to be restrained. In towers and steel structures, although many towers are aging and replacement demand is expected to increase in the future, profit remained sluggish owing to higher material costs and other factors. As a result, sales were ¥1,990 million, down ¥188 million, or 8.7%, year on year, and segment profit was ¥233 million, down ¥82 million, or 26.1%.」

「In the telecommunications industry, the coverage area for optical services has reached near-saturation, capital expenditure is being restrained, and demand for overhead line hardware remains weak. In towers and steel structures, sales and profit both declined because tower construction had been brought forward in the previous fiscal year. As a result, sales were ¥969 million, down ¥118 million, or 10.9%, year on year, and segment profit was ¥116 million, down ¥60 million, or 34.3%.」

「The telecommunications industry continues to restrain capital expenditure overall, while construction volumes are declining and competition for orders is intensifying.」

「The related fixed-line telephone market also continued to contract, and demand for overhead line hardware remained weak. Meanwhile, in towers and steel structures, both sales and profit for the segment increased as production of new towers rose. As a result, sales were ¥3,145 million, up ¥126 million, or 4.2%, year on year, and segment profit was ¥475 million, up ¥31 million, or 7.2%.」

「In the telecommunications industry, the coverage area for optical services is nearly saturated, but shipments of the company's related products increased owing to replacement work on utility poles. In towers and steel structures, orders for new towers increased, but profit remained sluggish owing to higher material costs and other factors.」

「In the telecommunications industry, the coverage area for optical services is nearly saturated, but shipments of the company's related products increased due in part to replacement work on utility poles. In towers and steel structures, the timing of tower construction has tended to move forward from the previous fiscal year, resulting in increases in both sales and profit.」

「The telecommunications industry continues to restrain capital expenditure overall, while construction volumes are declining and competition for orders is intensifying.」

「In the power and telecommunications segment, the concentration of construction work associated with contract changes following the full liberalization of electricity retailing, which began in April, delayed the progress of regularly scheduled construction, and shipments of the company's related products remained sluggish. In the telecommunications industry, replacement work on concrete poles shared with the power industry did not progress as planned, and demand for hardware remained weak.」

「In the power and telecommunications segment, the concentration of construction work associated with contract changes following the full liberalization of electricity retailing, which began in April, delayed the progress of regularly scheduled construction, and shipments of the company's related products remained sluggish. In the telecommunications industry, replacement work on concrete poles shared with the power industry also failed to progress as planned, resulting in difficult business conditions and subdued activity.」

「In the telecommunications industry, capital expenditure related to hardware demand has been restrained as the coverage area for optical services has reached near-saturation. In towers and steel structures, sales and profit both declined because the timing of tower construction differed from the previous fiscal year and bolt replacement work decreased. As a result, sales were ¥933 million, down ¥76 million, or 7.6%, year on year, and segment profit was ¥117 million, down ¥20 million, or 15.2%.」

「Accordingly, restraint on capital expenditure, the use of reused products and the expansion of competitive bidding have continued. Similarly, in the telecommunications industry, the nationwide rollout of optical cable networks and the development of wireless communications infrastructure are nearly complete. Investment related to the company's fixed-line telephone business is increasingly driven by replacement demand, but the volume of construction work is declining and competition for orders is intensifying.」