Digital Grid’s guidance raise is a margin story as much as a growth one. The power-trading platform operator lifted its outlook for the year to July to ¥6.595bn in sales, ¥2.836bn in operating profit, ¥2.660bn in ordinary profit and ¥1.919bn in net profit attributable to owners. That is only a 5% bump to revenue, but a 20% lift to operating profit and a 30% jump to net profit. Management said revenue recognition in the electricity platform and renewable energy platform businesses ran ahead of its original budget, while the battery-related aggregation service business, known as the AS business, remained firm.
| Metric | Previous guide | New guide | Change |
|---|---|---|---|
| Revenue | 6,281 | 6,595 | +314 (+5.0%) |
| Operating profit | 2,363 | 2,836 | +472 (+20.0%) |
| Ordinary profit | 2,128 | 2,660 | +532 (+25.0%) |
| Net profit attributable to owners | 1,476 | 1,919 | +442 (+30.0%) |
The raise also reflects how much of the old target was already in the books by April 30. In the nine months to that date, Digital Grid posted ¥5.107bn of sales, ¥2.448bn of operating profit, ¥2.551bn of ordinary profit and ¥1.872bn of net profit. In presentation materials, the company said operating profit had already reached 103.5% of its previous full-year plan, while net profit had reached 126.8%, which helps explain why the revision came now.
The operating drivers were not uniform. The core electricity platform business generated ¥4.357bn of revenue in the nine months to April, up 2.9% from a year earlier, but segment profit slipped 1.0% to ¥2.859bn. The renewable platform business was much faster, with revenue up 54.6% to ¥493m and segment profit up 113.5% to ¥254m. Other businesses, including battery aggregation, posted ¥256m of revenue and swung to ¥19.6m of segment profit from a loss a year earlier, which management said helped lead the group’s overall performance.
There are still caveats in the fine print. The presentation said DGP fee revenue fell 4% from the previous quarter because milder weather and fee-unit adjustments offset higher transaction volume, even as total contract capacity rose to 1,367MW. And in a separate Q&A, management said the AS business currently sees only limited impact from a March cut to the primary reserve market’s price cap, but warned that further cuts in price ceilings or procurement volumes could hurt profitability. As usual with guidance changes, the company also says actual results may differ from forecasts for various reasons.