J-POWER Q1 Operating Profit Rises 11.7% but Ordinary Profit Halves as US Asset-Sale Gain Lapses

Electric Power Development Co., Ltd. (TSE: 9513), the Tokyo-based wholesale power producer that trades internationally as J-POWER, reported consolidated results for the first quarter of the fiscal year ending March 2027 — the three months from April 1 to June 30, 2026 — under Japanese GAAP. Net sales rose 12.0% to ¥280,273 million and operating profit rose 11.7% to ¥36,282 million. Below the operating line the picture inverts: ordinary profit fell 45.9% to ¥39,561 million and profit attributable to owners of the parent fell 47.3% to ¥27,424 million. Basic earnings per share were ¥155.80 against ¥284.82 a year earlier, with no diluted figure presented. Comprehensive income moved the other way again, rising 132.6% to ¥36,834 million. The comparison base explains much of the divergence: in the year-earlier quarter ordinary profit had risen 108.5% and net profit 104.5%, an unusually high starting point built on a gain that did not repeat.

Thermal output covered a weak hydro season, and the top line still grew

Revenue growth came from three places. Electric power business revenue rose 6.9% to ¥201,197 million, within which wholesale electricity sales to other utilities rose 7.4% to ¥188,083 million while wheeling revenue was flat at ¥12,080 million. Overseas business revenue rose 33.8% to ¥66,458 million, and other business revenue rose 1.3% to ¥12,616 million. Underneath, the mix shifted sharply: the hydro water-flow rate fell to 94% from 105%, cutting renewable volumes 16.2% to 2,792 GWh — hydro alone dropped to 2,455 GWh from 2,985 GWh — while the thermal utilisation rate rose to 49% from 43%, lifting thermal volumes 16.0% to 7,769 GWh. Power resold after procurement on the wholesale exchange fell 27.2% to 2,619 GWh, leaving the generation segment 3.3% lower at 13,182 GWh. Overseas volumes rose 9.7% to 3,886 GWh on higher sales in Thailand, so group electricity sold finished at 17,068 GWh against 17,169 GWh — essentially flat volume with a much more profitable-to-report revenue mix.

Costs rose in step. Operating expenses climbed 12.0% to ¥243,990 million, with electric power business expenses up 10.3% to ¥174,935 million — fuel costs alone jumped 24.8% to ¥63,132 million — and overseas business expenses up 19.6% to ¥54,687 million. Because revenue and cost grew at the same 12.0% rate, the operating margin barely moved, at 12.9% against 13.0%. On the operating line, in other words, this was a quarter of growth without margin gain, and nothing more dramatic than that.

The entire profit gap sits below the operating line

Non-operating income fell 69.3% to ¥15,605 million from ¥50,905 million. One item accounts for nearly all of it: equity-method investment income dropped 78.3% to ¥10,110 million from ¥46,520 million, a decline of ¥36,409 million that the company attributes explicitly to the absence of the gain recognised a year earlier on the transfer of its equity interest in its US thermal power generation business. Non-operating expenses rose 19.5% to ¥12,326 million, with interest expense up 26.3% to ¥8,612 million and foreign-exchange losses up to ¥2,832 million from ¥797 million. Total quarterly ordinary revenue therefore slipped 1.8% to ¥295,878 million even as sales grew 12.0%, while ordinary expenses rose 12.4% to ¥256,317 million.

The arithmetic closes cleanly: ordinary profit fell ¥33,505 million year on year, and the equity-method swing alone was ¥36,409 million of it. Income taxes then fell to ¥9,369 million from ¥20,274 million, leaving quarterly net profit at ¥30,191 million against ¥52,793 million; non-controlling interests took ¥2,767 million against ¥705 million, which is why profit attributable to owners of the parent fell slightly faster than the group total, at 47.3%. For readers trying to judge the underlying business, operating profit — up 11.7%, on a flat margin — is the cleaner read; the halving further down reflects non-operating items measured against a one-off-inflated base rather than a deterioration in generation or transmission.

Overseas revenue up a third, overseas segment profit down two thirds

J-POWER reports segment profit on an ordinary-profit basis, so the segment table makes the split explicit. Power generation revenue rose 7.1% to ¥192,722 million on higher thermal plant utilisation and firmer wholesale-market prices, but segment profit slipped 1.8% to ¥20,152 million as higher fuel costs and purchased-power charges compressed the trading margin. Transmission and transformation revenue was flat at ¥12,341 million while segment profit fell 24.6% to ¥1,962 million on higher interest expense. Electric power-related revenue rose 9.0% to ¥17,285 million, helped by the weaker yen at the subsidiary holding the group's Australian coal-mining interests, though segment profit fell 33.3% to ¥1,895 million on higher cost of sales. Overseas revenue rose 33.8% to ¥66,458 million on the Thai volume increase, but segment profit fell 67.7% to ¥15,001 million from ¥46,487 million — the equity-method reversal, landing in one place. Other businesses contributed ¥2,890 million of revenue and ¥186 million of profit against ¥68 million. Aggregate segment profit fell to ¥39,198 million from ¥72,523 million, and the overseas segment supplied ¥31,486 million of that ¥33,325 million decline.

Assets grew on US solar and a Laos hydro stake; equity ratio slipped to 37.3%

Total assets rose ¥97.9 billion from the March year-end to ¥3,837,613 million, driven by construction progress at the Charger solar project in the United States, an investment in a Laotian hydroelectric business, and the weaker yen. Liabilities rose ¥72.4 billion to ¥2,277,688 million on higher long-term borrowings; interest-bearing debt rose ¥78.5 billion to ¥1,961.7 billion, of which ¥350.0 billion is non-recourse project debt attached to overseas businesses. Net assets rose ¥25.4 billion to ¥1,559,924 million, with shareholders' equity at ¥1,432,333 million against ¥1,405,468 million, so the equity ratio eased to 37.3% from 37.6% as the asset base grew faster than equity. The company also cancelled 6,713,200 treasury shares on May 15, 2026 under an April 30 board resolution, reducing both retained earnings and treasury stock by ¥19,999 million; shares issued fell to 176,337,900 from 183,051,100 and treasury shares to 309,239 from 7,042,805. Depreciation was ¥28,304 million against ¥28,277 million. No quarterly consolidated cash-flow statement was prepared, and two new companies entered the scope of consolidation during the period.

Full-year guidance unchanged; annual dividend planned at ¥105.00

J-POWER left its full-year forecast, published on May 12, 2026, entirely unchanged. It guides for net sales of ¥1,380,000 million (+16.7%), operating profit of ¥125,000 million (+23.8%), ordinary profit of ¥125,000 million (−21.2%) and profit attributable to owners of the parent of ¥81,000 million (+38.4%), with forecast EPS of ¥460.21. The guidance therefore already anticipates a lower ordinary profit for the year as a whole — the same non-operating reversal that shaped the quarter — alongside a higher operating profit and a higher bottom line. Measured against that plan, the quarter delivered 20.3% of forecast sales, 29.0% of forecast operating profit, 31.6% of forecast ordinary profit and 33.9% of forecast net profit, a front-loaded start on every profit line.

The dividend plan was likewise reported as unrevised from the company's previous announcement: an interim of ¥50.00 and a year-end of ¥55.00 for an annual ¥105.00, against the ¥50.00 plus ¥50.00, or ¥100.00, paid for the year ended March 2026. The increase comes entirely from the year-end payment. The quarterly consolidated financial statements were subject to a voluntary interim review by EY ShinNihon LLC.

Southeast Asia: a Mekong hydro joint venture and two Thai gas plants pending

Two transactions disclosed with the results extend the overseas platform whose earnings profile drove the quarter. On April 2, 2026, J-POWER formed a jointly controlled company for the Pak Lay hydroelectric project in Laos: Pak Lay Power Company Limited is held 51% by consolidated subsidiary JH International B.V. — of which J-POWER holds 48.96% indirectly — and 49% by Gulf Development Public Company Limited, and is accounted for by the equity method. The plant is a run-of-river design on the Mekong intended to limit river-environment impact, and the company frames it against its "BLUE MISSION 2050" carbon-neutrality target. Separately, on April 23, 2026, the group signed a contract through J-POWER Holdings (Thailand) to acquire partial stakes from Electricity Generating Public Company Limited in Klongluang Utilities — a 122,000 kW gas combined-cycle plant with 15 tonnes/hour of steam capacity in Pathum Thani, online since July 2017 — and Banpong Utilities, a 256,000 kW plant with 80 tonnes/hour of steam in Ratchaburi, online since October 2017. J-POWER will take 49% of each for a combined THB 2,765 million, with completion expected around August 2026 once Thai regulatory approvals are obtained, after which both become equity-method affiliates.

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.