KINDEN CORPORATION

Business Details

The Kinden Group operates as a single segment in the facility construction business (construction business). Its core operations include distribution line construction, general electrical construction, telecommunications construction, environment-related construction, and other power-related construction, with the Kansai Electric Power Group as its principal customer while also serving a broad range of private companies and public-sector clients. In addition to domestic subsidiaries, the company has overseas operations in the United States, Indonesia, the Philippines, Vietnam, Thailand, India, and the UAE. In FY2026 (ending March 2026), both consolidated and non-consolidated completed construction revenue and profits exceeded the prior-year results and full-year forecasts, marking record-high performance.

Recent Overview

FY2026 (ending March 2026) marked record-high performance with a 48% increase in operating profit; annual dividend of ¥240, including a special dividend, announced for the following period

Consolidated results for FY2026 (ending March 2026) achieved record highs across all key metrics: completed construction revenue of ¥750,742 million (up 6.5% year on year), operating profit of ¥90,256 million (up 48.0% year on year), ordinary profit of ¥94,493 million (up 46.4% year on year), and profit attributable to owners of parent of ¥69,447 million (up 47.0% year on year). On a non-consolidated basis, orders received for other power-related construction surged 104.1% year on year, and the period-end backlog accumulated to ¥581,797 million (up 23.2% year on year). Hokuko Denki Co., Ltd. was newly consolidated as a subsidiary. As a subsequent event, the company resolved to conduct a tender offer for its own shares. For FY2027 (ending March 2027), the company plans an annual dividend of ¥240, including a special dividend of ¥100 tied to the achievement of medium-term management plan and growth targets.

Key Products

Growth Drivers

• Expansion of orders in general electrical construction driven by strong private-sector capital investment demand (factories, logistics facilities, office buildings, etc.), with non-consolidated orders received up 13.9% year on year
• Rapid expansion of power infrastructure investment such as power generation and substation construction, with non-consolidated orders received in other power-related construction up 104.1% year on year
• Stable growth in distribution line construction volume for Kansai Transmission and Distribution, Inc.
• Improved profitability (operating profit margin significantly improved to 12.0%) driven by the establishment of industry practices ensuring appropriate construction periods and pricing under the revised "Act on Ensuring Proper Construction Businesses and Contracts" (Ninaite Sanpo) and related reforms
• Expansion of business scale and deepened regional presence through the consolidation of Hokuko Denki Co., Ltd. as a subsidiary
• Strengthened future revenue base from the accumulation of period-end backlog of ¥581,797 million (up 23.2% year on year)
• Enhanced future earning capacity through investment in business infrastructure, such as new offices in the greater Tokyo metropolitan area and new education-related facilities

Risks

• Impact on construction profitability from persistently elevated construction costs (materials and subcontracting expenses)
• Risk of rising energy prices due to escalating tensions in the Middle East
• Risk of reduced corporate capital expenditure due to US tariff policy and other factors
• Increase in costs and SG&A expenses due to skilled labor shortages and rising personnel costs (including base pay increases)
• Customer concentration risk from sales dependence on the Kansai Electric Power Group (approximately 18% of non-consolidated completed construction revenue)
• Foreign exchange and country risk at overseas subsidiaries (US, Southeast Asia, Middle East, etc.)
• Increase in provision for construction losses (consolidated period-end balance of ¥8,317 million, up from ¥7,281 million at the prior period-end)
• Risk of reduced asset efficiency due to large-scale acquisition of fixed assets (¥53,597 million in investing cash outflows)