8070.T

Overall Financial Performance

• Consolidated revenue fell 9.9 billion yen year-over-year to 31.2 billion yen, due to the lapse of transitory prior year factors including large solar construction project handover and business authorization right sale. Consolidated operating profit rose 0.6 billion yen year-over-year to 1.6 billion yen, and net profit attributable to parent company shareholders rose 0.7 billion yen year-over-year to 1.3 billion yen, driven by strong performance of core thermal power maintenance and the start of long-term biomass fuel supply contracts.
• Cash flow from operating activities turned positive at 1.1 billion yen, a major improvement from the prior year's adjusted negative result after completion of capital-intensive solar construction projects. Cash flow from investing activities was positive 0.8 billion yen from fixed asset sales, and cash flow from financing activities narrowed its negative gap to minus 0.7 billion yen. Cash and cash equivalents ended the period at 11.9 billion yen, up 1.3 billion yen from the prior fiscal year end.

Contract Performance

• Thermal power: Both contracted value and order backlog increased year-over-year, driven by a large replacement order for high-efficiency low-emission power generation equipment.
• Nuclear & Other: Both contracted value and order backlog increased year-over-year, driven by strong equipment delivery to major plant manufacturers and good performance of nuclear fuel reprocessing plant agency work.
• Renewable Energy: Contracted value increased year-over-year after starting all long-term biomass supply contracts, but order backlog decreased as large solar construction projects were completed with minimal remaining work.
• Production & Environment Equipment: Contracted value decreased year-over-year but was flat after adjusting for prior year special factors; order backlog decreased as core plant construction projects progressed steadily.

Mid-Term Management Plan Core 5 Key Strategy Progress

• Active Engagement in Energy Transition: Increased staffing for expected growth in nuclear-related business via reallocation from other segments to strengthen on-site response capabilities. For renewables, sales efforts are underway to capture demand for fuel switching from coal to pellets to meet domestic factories' decarbonization needs for in-house power generation.
• Business Creation for Sustainable Society: Established a new dedicated department to capture renewal demand for aging social infrastructure such as waste incinerators. The company will continue evaluating profitability of existing businesses while actively allocating staff to high-growth areas.
• Strengthen Group Comprehensive Capabilities: Advanced business alliances and agency agreements with manufacturers in priority areas. This period, the company signed an agency agreement with an overseas manufacturer to meet demand after a domestic manufacturer exited insulator production, and formed a business alliance with a comprehensive plant, construction and civil engineering firm. Going forward, the company will capture construction demand for factory construction and existing facility renovations tied to equipment sales.
• Build a Resilient Management Base: Continued work to embed strengthened risk management outlined in prior recurrence prevention measures. This period, an external expert was hired to develop strengthened risk management for construction contracting, and the core system reconstruction project for better system governance has finalized business reform guidelines and will begin drafting requirement specifications for implementation.
• Expand Shareholder Returns: The company will continue strengthening its financial base while maintaining a dividend on equity (DOE) above 4%.

• Management maintained the full-year FY2026 guidance at 65.0 billion yen consolidated revenue, 2.4 billion yen consolidated operating profit, and 3.7 billion yen consolidated net profit, despite an okay first half operating profit progress, as the strong first half performance is driven by pulled-forward thermal power agency projects and foreign exchange impacts on the fuel supply business.
• The 2.5 billion yen special profit from the already announced sale of the company's own solar power generation facilities has been incorporated into second half net profit guidance.
• The full-year dividend guidance is maintained at 38 yen per share, a 1 yen per share increase in both the first and second half from the prior year, aligned with the company's long-term policy of stable dividends with a minimum 4% DOE.

1. Electric Power Business: Revenue of 12.6 billion yen, operating profit of 1.19 billion yen, achieved year-over-year revenue and profit growth. It accounts for 40.4% of total consolidated segment revenue.
2. Environment, Chemical & Machinery Business: Revenue of 15.6 billion yen, operating profit of 0.31 billion yen, with year-over-year revenue and profit decline driven by the lapse of transitory factors from the prior year. It accounts for 50% of total consolidated segment revenue.
3. Living Industry Business: Revenue of 3.0 billion yen, operating profit of 0.14 billion yen, achieved year-over-year revenue and profit growth on expanded sales to existing customers of core packaging materials. It accounts for 9.6% of total consolidated segment revenue.

By business sub-segment:

• Thermal Power: 2.7 billion yen in consolidated revenue, 0.52 billion yen in consolidated operating profit, with year-over-year revenue and profit growth.
• Nuclear & Other: 2.6 billion yen in consolidated revenue, 0.35 billion yen in consolidated operating profit, largely flat compared to the high prior year period.
• Renewable Energy: Revenue decreased year-over-year after handover of large solar construction projects at the end of prior fiscal year, but operating profit increased 0.43 billion yen year-over-year due to improved contract profitability and the start of all long-term biomass fuel supply deliveries.
• Production & Environment Equipment: Revenue decreased year-over-year after lapse of transitory prior year factors, and profit decreased due to the aftereffect of a large equipment delivery at the European subsidiary in the prior year.

• Prior issues related to loss risk and inappropriate accounting treatment for solar-related construction projects have been addressed, with strengthened risk management frameworks now in place following completion of the large solar construction project handover in the prior year.
• Continued work is ongoing to embed and strengthen risk management practices, with a new initiative to strengthen risk management specifically for construction contracting via external expert input.

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