TOKYO, Jul 07 (Pulse News Wire) – SALA Corporation (2734.NG) reported a derivative gain of ¥793 million in its second quarter ending December 01, 2025 due to fluctuations in foreign exchange rates affecting its currency hedging contracts. The company's subsidiary, SALA ePower Kabushiki Kaisha, entered into foreign-currency-denominated import material purchase agreements in 2017 and subsequently established currency hedges to mitigate exchange rate risks during the fixed-price procurement period until 2039.
In addition, the company secured additional currency hedges covering the period from 2025 to 2039 to address increased exchange rate risks resulting from rising import material prices. As of the end of the fiscal year 2025, the net balance of outstanding currency hedges was evaluated at ¥7.076 billion, which was reclassified as an extraordinary expense. In the second quarter of 2026, the evaluation gain stood at ¥7.869 billion, leading to a total derivative gain of ¥793 million recorded as extraordinary income.
Furthermore, the outstanding balance of currency hedges is expected to decrease as operations progress, reaching zero by 2039. Consequently, there will be no further valuation gains or losses related to these hedges in the final year of the fixed-price procurement system. All derivative gains and losses associated with these hedges since their inception in 2017 and 2025 will be fully offset through carryover adjustments, resulting in a cumulative derivative gain of ¥0 million.
SALA Corporation maintains its dividend policy, aiming to sustain or exceed previous levels while excluding the impact of currency hedge-related gains, ensuring a consolidated dividend payout ratio of 40% or higher.
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