Kanadevia Corporation (TSE: 7004), the Osaka-based environmental and industrial machinery group renamed from Hitachi Zosen in 2024, reported FY2026 results (year ended March 31, 2026) under Japanese GAAP showing a sharp divergence between the top and bottom lines. Consolidated revenue rose 5.7% year-on-year to ¥645.2 billion, but operating profit more than halved, falling 54.8% to ¥12.2 billion. Ordinary profit declined 44.0% to ¥13.6 billion and profit attributable to owners of the parent dropped 49.6% to ¥11.1 billion.
Earnings per share fell to ¥66.20 from ¥131.33 a year earlier, while comprehensive income decreased 60.9% to ¥12.2 billion. The operating margin compressed to just 1.9% and ROE eased to 5.8%. The group, whose core business is waste-to-energy (energy-from-waste) plants alongside process equipment, precision machinery, marine and infrastructure operations, continues to rebuild after disclosing an engine emissions/data-compliance issue in 2024.
Environment segment grows revenue but earns less
The divergence between higher revenue and lower profit was concentrated in the Environment segment, which covers Kanadevia's flagship waste-to-energy plants. Segment revenue rose to ¥505.2 billion, but segment operating profit slipped to ¥16.7 billion on a less favorable project mix — fewer high-margin projects — and technical troubles at an overseas subsidiary that weighed on profitability. During the year the group also deconsolidated five companies, including machine-tool maker H&F (H&F Services entities), reshaping the consolidation perimeter and contributing to the year-on-year swing.
Balance sheet and dividend
Total assets stood at ¥718.6 billion and net assets at ¥203.4 billion at year-end, leaving the equity ratio at 27.4%, down from 31.1% a year earlier. Book value per share was ¥1,169.89. Operating cash flow came in at ¥11.6 billion and cash and equivalents ended the year at ¥77.3 billion. Kanadevia held the FY2026 annual dividend flat at ¥25.00 per share (all paid as a year-end dividend), a payout ratio of 37.8%. For FY2027 the company plans to raise the annual dividend to ¥38.00 per share, equating to a payout ratio of 30.5%.
FY27 outlook: a sharp profit rebound
For FY2027 (ending March 2027), Kanadevia guides for a strong recovery in profitability even as revenue holds roughly flat. The company forecasts revenue of ¥640.0 billion (-0.8%), operating profit of ¥25.5 billion (+109.2%), ordinary profit of ¥22.0 billion (+61.5%) and net profit attributable to owners of ¥21.0 billion (+88.6%), with EPS of ¥124.83. The guidance implies operating profit roughly doubling from the depressed FY2026 base, as the company works through the overseas project issues and rebuilds margins in its core waste-to-energy business.
| Metric | FY2026 | FY2025 | YoY |
|---|---|---|---|
| Revenue (¥ billion) | 645.2 | 610.5 | +5.7% |
| Operating profit (¥ billion) | 12.2 | 26.9 | -54.8% |
| Ordinary profit (¥ billion) | 13.6 | 24.3 | -44.0% |
| Net profit attrib. to owners (¥ billion) | 11.1 | 22.1 | -49.6% |
| EPS (¥) | 66.20 | 131.33 | -49.6% |
| Operating margin | 1.9% | 4.4% | -2.5pp |
| ROE | 5.8% | 11.6% | -5.8pp |
| Equity ratio | 27.4% | 31.1% | -3.7pp |
JapanStockPulse provides informational content only and does not constitute investment advice. Figures are taken from the company's published earnings short report and may be subject to subsequent revision.