Kanadevia Corporation

Business Details

Handles the design, manufacture, installation, and operation of Waste-to-Energy & Recycling Facilities (Waste to X), Water & Sludge Treatment Facilities, Energy Systems (Power Generation Equipment), biomass utilization systems, Seawater Desalination Plants, and more. In addition to domestic EPC, overseas subsidiaries in Europe, Australia, and elsewhere—centered on Kanadevia Inova AG. (Switzerland)—account for the majority of sales, making this the group's largest segment, comprising approximately 74% of consolidated net sales. Also engages in wholesale electricity sales.

Recent Overview

A technical issue at an overseas subsidiary during the cumulative Q3 period led to a downward revision of the full-year operating income forecast

For the cumulative nine months of FY2025 (April to December 2025), net sales reached ¥331,474 million (+8.5% YoY), securing increased revenue. However, due to a decrease in high-margin projects and the impact of a technical issue at an overseas subsidiary, operating income was only ¥678 million, a significant decline from ¥11,741 million in the same period of the prior year. The full-year operating income forecast for the Environment segment was revised downward from the previously announced ¥19,700 million to ¥16,200 million. On the other hand, the full-year orders received forecast for FY2025 was revised upward to ¥572,000 million (up ¥12,000 million from the previous announcement), and the order backlog remained at a high level of ¥1,660,600 million as of the end of December 2025.

Key Products

Growth Drivers

• Sales expansion of overseas subsidiaries (Kanadevia Inova AG. group): growth of the European Waste to X business is a key driver of net sales and profit
• Business area expansion through M&A: the acquisitions of Kanadevia Inova Denmark A/S (formerly Babcock & Wilcox Renewable Service A/S) and Iona Capital Ltd strengthen continuous business (operation & maintenance) in Europe
• Improvement in domestic EPC profitability: profitability improvement in domestic waste-to-energy facility design and construction projects
• High order backlog level: the order backlog of ¥1,623,166 million at the end of FY2025 (ended March 2025) (+11.2% YoY) supports medium- to long-term sales
• Expansion of water business for the Middle East and Asia: increased demand for seawater desalination plants led to a substantial YoY increase in sales to the Middle East

Risks

• Risk of technical trouble at overseas subsidiaries: a technical issue occurred at an overseas environmental subsidiary in Q3 of FY2025, leading to a downward revision of the full-year operating income forecast (down ¥4,500 million from the previous announcement)
• Decrease in high-margin projects: risk of declining profit margins due to deterioration in the project mix
• Foreign exchange risk: in overseas operations (Europe, Australia, the Middle East, etc.), which account for approximately half of net sales, yen appreciation poses a risk of pressuring yen-denominated sales and profit
• Risks related to quality non-compliance: inappropriate conduct has been identified at combustible waste incineration facilities and human waste treatment facilities, among others, with residual risk of additional cost recognition and damage to customer trust
• Risk of additional provisions for construction contract losses: risk of additional provisions for construction contract losses due to cost overruns on large-scale EPC projects