Premium Water Holdings,Inc.

Business Details

A single-segment business centered on the manufacturing and home delivery sales of natural mineral water and the rental of water-purifying water servers. Natural water sourced from water collection sites across Japan is delivered directly to customers' homes in the company's proprietary one-way PET bottles, offering the convenience of not requiring empty bottle collection. Customers are acquired through three channels: direct sales via demonstration sales, telemarketing and web; sales agents; and distributors/authorized dealers/OEM. The number of contracts held expanded to 1.82 million at the end of FY2026 (ending March 2026).

Recent Overview

FY2026 (ending March 2026) achieved higher revenue and profit, with performance accelerating as contracts held reached 1.82 million and net profit rose 50%

For FY2026 (ending March 2026), revenue was ¥80,323 million (up 4.5% year on year), operating profit was ¥12,647 million (up 10.1%), and profit attributable to owners of parent was ¥8,450 million (up 50.1%), achieving a substantial increase in profit. The number of contracts held expanded from 1.73 million at the end of the prior period to 1.82 million. In the fourth quarter, the company revised the amortization period for water-purifying water server-related assets, resulting in a change in accounting estimate effect that increased operating profit by ¥2,011 million. As subsequent events, the company resolved to introduce a performance-linked stock compensation plan (BBT-RS), adopted a comprehensive resolution for the issuance of domestic unsecured straight bonds of up to ¥4.0 billion, and resolved to acquire treasury shares up to ¥500 million (up to 125,000 shares). For FY2027 (ending March 2027), the company forecasts revenue of ¥82,500 million, operating profit of ¥13,500 million, and profit attributable to owners of parent of ¥9,000 million.

Key Products

Growth Drivers

• Favorable impact on the business environment from growing consumer awareness of drinking water quality and safety and expanding demand for disaster-preparedness stockpiling
• Continued expansion of the number of contracts held (1.82 million at the end of FY2026, ending March 2026), strengthening a stable subscription revenue base
• Stabilization of the customer base and improved retention rate of existing customers through enhanced provision of long-term contract plans
• Reduction in manufacturing costs through more efficient customer acquisition costs and higher factory utilization rates, and stabilization of delivery costs through the construction of a proprietary logistics network
• Cost reduction effects in manufacturing and logistics from an increase in the in-house manufacturing ratio and the construction of a proprietary logistics network (expected to continue in FY2027, ending March 2027)
• Profit-boosting effect from the revision of the amortization period for water-purifying water server-related assets (+¥2,011 million in operating profit for the current fiscal year)
• Boost to profit before income tax from improvement in share of profit (loss) of investments accounted for using the equity method (from -¥846 million in the prior period to +¥115 million in the current period)

Risks

• Risk of failing to meet listing maintenance criteria due to a decline in the tradable share ratio resulting from the Hikari Tsushin group's holding of common stock
• Profit pressure from increased costs such as personnel expenses and sales promotion expenses (selling, general and administrative expenses of ¥55,908 million in the current fiscal year, an increase from the prior period)
• Risk of rising procurement costs due to chronic increases in resource and raw material prices and factors such as U.S. tariff policy
• Increased financial leverage due to a rise in interest-bearing debt (current ¥25,410 million + non-current ¥52,376 million = total ¥77,786 million)
• The revision of the amortization period for water-purifying water server-related assets is a change in accounting estimate, and investor views may differ regarding the sustainability of future profit levels
• Risk of rising costs for procuring parts and raw materials due to unstable international conditions, geopolitical risk, and yen depreciation
• Risk of increased complexity in capital structure and dilution associated with the issuance of 9,046,070 shares of Class B preferred stock (March 2026)