Q1 progress against the full-year forecast: revenue is weak, while operating profit is ahead

Revenue for the fiscal year ended March 2026 was ¥1,182.26 billion and operating profit was ¥100.992 billion, while the company's forecasts for the fiscal year ending March 2027 are ¥1,380 billion in revenue and ¥125 billion in operating profit, representing expected year-on-year increases of 16.7% and 23.8%, respectively. The plan appears to be to recover the power generation and overseas businesses, which reported lower revenue and profit in the previous fiscal year, through higher thermal power utilisation, increased electricity sales and contributions from new projects.

First-quarter revenue was ¥280.273 billion, up 12.0% year on year, and operating profit was ¥36.282 billion, up 11.7%. Revenue progress against the full-year forecast was 20.3%, 4.7 percentage points below the simple 25% benchmark that disregards seasonality, while operating profit progress was 29.0%, 4.0 percentage points above the simple benchmark. The operating margin was approximately 12.95%, almost unchanged from approximately 12.98% in the same quarter of the previous year, indicating at this stage that the timing of first-quarter profit recognition is ahead of any improvement in margins.

By segment, revenue from the power generation business was ¥189.488 billion, up 7.1% year on year; overseas business revenue was ¥66.458 billion, up 33.8%; and revenue from the power-related business was ¥9.568 billion, up 6.4%. Revenue from the transmission and transformation business was ¥12.192 billion, down 0.1%, while revenue from other businesses was ¥2.565 billion, up just 0.6%. Growth in overseas revenue supported overall progress, but as discussed below, overseas profit declined, and it has not yet been confirmed whether revenue growth is translating directly into full-year profit accumulation.

For the next reporting period, FY2027-H1, we will assess the position against the simple first-half benchmarks of ¥690 billion in revenue and ¥62.5 billion in operating profit, equivalent to 50% of the full-year forecasts. As the company did not prepare a cash flow statement for the first quarter and operating and investing cash flows were not disclosed, key points for the first half will include not only profit progress but also investment spending, cash recovery, and whether the full-year forecasts are maintained or revised.