Shikoku Electric Q1 FY2027: Net Profit Jumps 29% on Wholesale Surge

Shikoku Electric reported consolidated revenue of ¥182.2 billion (+3.8% YoY), operating profit of ¥23.5 billion (+3.8%), ordinary profit of ¥26.9 billion (+19.0%), and net profit attributable to parent shareholders of ¥19.7 billion (+29.1%) for the first quarter of fiscal 2027.

Revenue growth was fueled by a 41.7% jump in wholesale sales to ¥45.6 billion, reflecting increased bilateral and exchange-based transactions. Retail sales revenue fell 9.1% to ¥102.7 billion on lower contract demand, but other businesses grew 8.6% and supported the top line.

On the cost side, operating expenses rose 3.8% on higher personnel and supply-demand costs, but the revenue increase more than offset this. Non-operating income swelled to ¥5,539 million thanks to equity-method gains and securities sale profits, pushing ordinary profit growth above that of operating profit. Net profit surged nearly 30%, as expanded revenue absorbed cost pressures.

Earnings per share improved to ¥96.55 from ¥74.32 a year earlier.

Shikoku Electric’s five main segments, plus “Other,” showed a clear pattern: the Power Generation and Sales business contributed the bulk of profit, while Other also delivered strong growth.

Power Generation and Sales external revenue rose 3.0% to ¥139,915 million and segment profit jumped 14.0% to ¥21,154 million, driven by wholesale revenue gains and full-load operation of the Ikata No. 3 nuclear unit.

Transmission and Distribution revenue inched up 4.3% to ¥18,593 million, but the segment posted a loss of ¥522 million, an improvement from a ¥1,227 million loss a year earlier, thanks to higher wheeling revenue and cost efficiencies.

Information and Communications was essentially flat, with revenue up 1.4% to ¥10,097 million and profit down 1.6% to ¥2,893 million.

Energy performed strongly: revenue +14.0% to ¥6,424 million, profit +43.7% to ¥1,951 million, driven by fuel sales and other activities.

Construction and Engineering posted moderate growth: revenue +4.7% to ¥4,431 million, profit +27.1% to ¥554 million.

Other businesses surged: revenue +32.2% to ¥2,790 million, profit +39.7% to ¥848 million.

The table below details each segment’s external revenue and segment profit.

Total assets at the end of Q1 stood at ¥1,723.9 billion, down ¥10.4 billion from the prior fiscal year-end. Cash and equivalents dropped sharply to ¥51.9 billion (from ¥78.5 billion), while utility plant assets rose to ¥955.0 billion (from ¥951.7 billion).

Liabilities fell ¥24.7 billion to ¥1,232.1 billion. Interest-bearing debt (bonds and borrowings) rose ¥7.5 billion to ¥934.7 billion due to CP issuance and other funding. Net assets increased ¥14.3 billion to ¥491.8 billion, lifting the equity ratio to 28.4% (from 27.4%).

Depreciation was almost flat at ¥16,540 million (¥16,591 million a year earlier).

The company plans to raise the interim dividend to ¥27.50, bringing the full-year forecast to ¥55.00 per share, a ¥5.00 increase from the previous year. Retained earnings have accumulated to ¥310.9 billion, providing ample capacity for shareholder returns. No share buyback was mentioned.

The earnings report contains no specific risk disclosures, but the following factors are relevant:

• Long-term electricity demand decline: Retail sales volume fell 6.6% year-on-year, and shrinking contract demand may continue to pressure the revenue base.
• Fuel price volatility: Thermal fuel costs totaled ¥17.6 billion, and international price swings could affect earnings.
• Nuclear dependency: Full operation of the Ikata No. 3 unit is a major profit contributor, but any outage poses a risk.
• Persistent T&D losses: Although the loss narrowed, the transmission and distribution segment remains in the red, requiring further cost cuts or revenue measures.
• Foreign exchange risk: The foreign currency translation adjustment account increased from the prior year-end, indicating exposure from overseas investments.

Full-year consolidated forecasts are unchanged: revenue ¥925.0 billion (+21.4% from the prior year), operating profit ¥37.0 billion (-45.5%), ordinary profit ¥40.0 billion (-41.1%), and net profit ¥30.0 billion (-41.0%).

The steep declines anticipate the reversal of prior-year gains from the fuel-cost adjustment system and higher fuel and purchased power costs. Although Q1 profits exceeded year-earlier levels, a full-year correction is expected.

Q1 progress rates are 19.7% for revenue and a high 63.5% for operating profit, suggesting possible upside, but management is maintaining a cautious view.

During the quarter, Shikoku Electric added Shikoku T&D Service as a consolidated subsidiary and included Mithra Solar Holding Ltd as an equity-method affiliate through an investment in overseas renewable energy. These moves signal internalization of transmission and distribution services and entry into overseas solar power: steps toward decarbonization and revenue diversification.