OTANI KOGYO CO.,LTD.

Business Details

With electric power companies and communications companies as its primary customers, this segment manufactures and sells Overhead Line Fittings (support fittings for transmission and distribution lines, etc.) and Steel Towers & Steel Structures. In FY2026 (ending March 2026), sales amounted to ¥4,848 million, accounting for approximately 64% of total company sales, making it the core business. The primary sources of revenue are demand for replacement of deteriorated utility poles and renewal of aging transmission and distribution equipment, with performance linked to the capital expenditure trends of electric power companies under the revenue cap system. Hokuriku Electric Power Transmission & Distribution Co., Inc. is a major customer (sales of ¥796 million, approximately 10.6% of total company sales).

Recent Overview

Shipments were favorable due to progress in shared pole renewal work, but profit was squeezed by increased depreciation associated with the Toyama Kureha plant coming into operation

In the Electric Power & Communications Division for FY2026 (ending March 2026), shipments of related products progressed favorably as renewal work on shared utility poles proceeded as planned. In the communications-related area, although investment in optical construction work was sluggish, this was offset by relocation work for obstacles and maintenance work, which had a leveling effect. On the other hand, the transfer of part of the manufacturing process to the newly constructed Toyama Kureha plant, a new production base, resulted in a substantial increase in manufacturing expenses such as depreciation (from ¥86 million in the prior period to ¥201 million). As a result, sales decreased by ¥84 million (1.7%) year on year to ¥4,848 million, and segment profit decreased by ¥119 million (15.4%) year on year to ¥656 million.

Key Products

Growth Drivers

• Continued expansion of demand for renewal work on deteriorated utility poles and aging transmission and distribution equipment
• Progress in planned capital expenditure by electric power companies under the first regulatory period (2023-2027) of the revenue cap system
• Expansion of investment in transmission and distribution infrastructure due to increased power demand associated with new and expanded data centers and semiconductor plants
• Demand for transmission and distribution network development in response to the expanded adoption of renewable energy
• Continued demand for infrastructure restoration associated with the Noto Peninsula earthquake and the Oku-Noto heavy rain disaster
• Progress in production rationalization and efficiency through the operation of the Toyama Kureha plant (cost reduction effects over the medium to long term)

Risks

• Profit pressure from increased manufacturing expenses such as depreciation associated with the construction of the Toyama Kureha plant (a sharp increase of approximately 2.3 times year on year)
• Risk of fluctuations in raw material prices such as steel and the risk of difficulty in passing on such costs to sales prices
• Pressure to lower order unit prices due to demands for cost efficiency from electric power companies under the revenue cap system
• Continued risk of sluggish investment in optical construction work related to communications
• Risk of economic downturn due to the impact of US trade policy
• Risk of sales concentration in Hokuriku Electric Power Transmission & Distribution Co., Inc. (approximately 10.6% of total company sales)