Kanadevia Corporation
7004・Prime Market・Machinery
Business
Kanadevia Corporation (formerly Hitachi Zosen) is a comprehensive engineering company with a history dating back to its founding in 1881. Comprising 158 consolidated subsidiaries and 35 equity-method affiliates, the company operates three segments: Environment (Waste-to-Energy & Recycling Facilities, water treatment, seawater desalination), Machinery & Infrastructure (industrial machinery, bridges, shield tunneling machines), and Decarbonization (marine engines, water electrolysis, wind power generation). Of the ¥610,523 million in net sales for FY2025 (ended March 2025), the Environment segment accounted for ¥453,471 million (74%), with the Kanadevia Inova AG group, which handles the European Waste to X business, driving overseas sales. The overseas sales ratio has reached 49%.
Business Model
In the core Environment segment, the company receives orders for the design, procurement, and construction (EPC) of waste-to-energy facilities and water treatment plants, and transitions to ongoing operation, maintenance, and service businesses after completion, adopting a two-stage revenue model. The consolidated order backlog at the end of FY2025 (ended March 2025) remained at a high level of ¥1,796,499 million (+9.5% year on year), underpinning mid- to long-term sales. The share of continuous business in total sales was 41% (FY2025 (ended March 2025)), and the company aims to achieve 50% during FY2025.
Company Strengths
The consolidated order backlog at the end of FY2025 (ended March 2025) stood at ¥1,796,499 million (up 9.5% year on year). Of this, the Environment segment alone accounted for ¥1,623,166 million (up 11.2% year on year), equivalent to roughly three years of sales, providing structural support for medium- to long-term earnings.
Growth in the European Waste-to-Energy & Recycling Facilities (Waste to X) business, centered on the Kanadevia Inova AG. group, pushed the overseas sales ratio to 49% in FY2025 (ended March 2025), achieving ahead of schedule the 40% target for fiscal 2025 set out in the medium-term management plan "Forward 25." M&A activity in Denmark and the UK has also expanded continuing operations (operation and maintenance).
Sales increased 49.4% over five fiscal years, from ¥408,592 million in FY2021 (ended March 2021) to ¥610,523 million in FY2025 (ended March 2025), with the increase in sales in the most recent two fiscal years remaining at a high level. Operating profit rose for four consecutive fiscal years from a low of ¥15,541 million in FY2022 (ended March 2022) to reach ¥26,946 million, while net income of ¥22,103 million marked a new record high.
ENVALITH's Perspective
Performance Trend
Revenue for FY2026 (ending March 2026) came to ¥645,222 million (+5.7% YoY), achieving revenue growth for the sixth consecutive period. However, operating profit fell sharply to ¥12,192 million (-54.7% YoY) and net income attributable to owners of the parent declined to ¥11,137 million (-49.6% YoY), representing a substantial decrease in profit. The profit trend, which had continued to improve over the past four periods, has clearly reversed. Although the earnings summary does not provide details on the factors behind the sharp profit decline despite revenue growth, it is likely mainly attributable to deteriorating profitability on individual order projects and rising costs. Cash flow from investing activities was -¥48,035 million (compared with -¥56,573 million in the previous period), showing a narrower outflow, but the company continues to pursue active M&A and capital expenditure. Separately, a partial correction to the consolidated cash flow statement (regarding the separate presentation of proceeds and expenditures from the sale of subsidiary shares) was disclosed in June 2026, but this has no impact on the total cash flow from investing activities.
Growth Strategy
Aiming for revenue of ¥900,000 million and an operating margin of 10% by 2030 through overseas expansion of Waste to X operations, raising continuous business ratio to 50%, and decarbonization investment
Expanding the waste-to-energy business in Europe centered on the Kanadevia Inova AG group. Through acquisitions such as Kanadevia Inova Denmark A/S and Iona Capital Ltd, the company is building up continuous businesses such as operation and maintenance, aiming to increase the ratio of stock-type revenue.
Constructing a mass-production plant for water electrolysis stacks in Tsuru City, Yamanashi Prefecture (scale of approximately ¥8.0 billion), aiming to establish a full-scale hydrogen and Power to Gas business. Also promoting overseas expansion of floating offshore wind power generation and nuclear-related businesses (NAC International Inc.). Currently executing a three-year investment plan of ¥140.0 billion.
Expanding water treatment business for the Middle East and Asia against a backdrop of increasing demand for Seawater Desalination Plants. Sales performance has increased significantly year on year, contributing to earnings stabilization through regional diversification.
Restructuring low-profitability businesses, including the transfer of the press business to Amada Co., Ltd., to concentrate management resources on highly profitable businesses. Orders received are on a recovery trend, up 12.9% year on year to ¥91,179 million, and the company is promoting the expansion of continuous businesses such as maintenance and servicing.
Last updated: July 17, 2026