Latest Tokyo Brief coverage on DIGITAL GRID Corporation, tracking filings, financial news, and market signals from Japan.
TSE:350A
Digital Grid's contracted power capacity jumped 38% and revenue hit a record, but the company guided next year's operating profit down 5% and its net profit down nearly 18%, as a debt-funded pivot into owning grid-scale batteries cut its equity ratio to 34.1% and pushed operating cash flow negative.
Digital Grid raised its full-year outlook to ¥6.595 billion in revenue and ¥1.919 billion in net profit after nine-month net profit rose 17.9% to ¥1.872 billion. Management said Power PF and Renewable PF recognized more revenue than budgeted, while the AS business also helped. The read-through is positive, but not just because of the core platform: Renewable PF sales rose 54.6% over the first nine months, and presentation materials showed DGP fee revenue eased quarter on quarter even as handled power volume edged up.
Digital Grid raised its outlook for the year to July to ¥6.595 billion in sales, ¥2.836 billion in operating profit and ¥1.919 billion in net profit, after nine-month profit already ran past the old plan. Management pointed to faster-than-budgeted revenue recognition in the electricity and renewable platform businesses and firm battery-related aggregation services. The asterisk is that some platform fee trends softened quarter on quarter, and the company says further reserve-market price-cap cuts could still hurt the AS business.