ETS Group Co., Ltd.

Business Details

Comprises the Electric Power business (overhead transmission line construction, substation works, etc., handled by ETS Line, Iwai Kogyosho, and DC Line) and the Facilities business (electrical facility construction for extra-high-voltage substations, renewable energy power plants, data centers, etc.). Major customers are Tohoku Electric Power Network (37.5% of completed construction revenue) and Tokyo Electric Power Grid (15.5% of the same). In H1 FY2026 (ending March 2026), steady progress on transmission line construction, accelerated progress in the Facilities business, and improved construction profitability drove substantial increases in both revenue and profit.

Recent Overview

Steady progress on transmission line construction and improved profitability drove profit to more than 2.2 times the prior-year level in the interim period

In the Electrical Construction Business segment for H1 FY2026 (October 2025–March 2026), net sales were ¥4,845 million (up 13.7% year on year) and segment profit was ¥637 million (up 123.7% year on year), achieving substantial growth in both revenue and profit. Transmission line construction progressed steadily across regions, while the Facilities business, centered on extra-high-voltage substation construction, also saw accelerated progress. In addition, improved construction profitability in the Electric Power business significantly boosted profit. Note that consolidated orders received in the interim period fell sharply by -70.5% year on year to ¥2,395 million; this reflects a priority on completing orders received in the prior consolidated fiscal year, and given the ample backlog (¥15,263 million as of September 30, 2025), sales and profit are trending solidly.

Key Products

Growth Drivers

• Increasing demand for transmission line reinforcement driven by the expansion of renewable energy adoption toward carbon neutrality
• Rapid increase in extra-high-voltage substation construction for data centers amid the coming era of mass electricity consumption driven by expanding AI use
• Continued expansion of wide-area interconnection development and aging equipment replacement work based on the master plan of the Organization for Cross-regional Coordination of Transmission Operators
• Expansion of construction areas beyond the Tohoku region into the Tokyo Electric Power service area, Chugoku, and Shikoku
• High visibility of future sales supported by an ample backlog (¥15,263 million)
• Room for further margin improvement through continued gains in construction profitability

Risks

• Risk of rising construction costs due to surging material prices and labor costs
• Constraints on construction capacity due to aging skilled workers and labor shortages
• Increased costs of complying with overtime work regulations (applicable to the construction industry from 2024)
• Customer concentration risk with Tohoku Electric Power Network and Tokyo Electric Power Grid (top two customers account for 53% of completed construction revenue)
• Risk of period profit/loss volatility due to schedule delays and shifts in completion timing on large-scale projects
• Orders received in the interim period declined sharply by -70.5% year on year, requiring close monitoring of order accumulation trends in the second half and beyond