| Metric | Current Period | Prior Year Same Period | YoY |
|---|---|---|---|
| Revenue / Net Sales | ¥2084.8B | ¥2000.6B | +4.2% |
| Operating Income | ¥212.8B | ¥185.5B | +14.7% |
| Ordinary Income | ¥212.2B | ¥185.8B | +14.2% |
| Net Income | ¥190.9B | ¥117.3B | +62.7% |
| ROE | 28.3% | 17.4% | - |
For the fiscal year ended March 2026, the company delivered revenue of ¥2,084.8B (YoY +¥84.2B, +4.2%), Operating Income of ¥212.8B (YoY +¥27.3B, +14.7%), Ordinary Income of ¥212.2B (YoY +¥26.4B, +14.2%), and Net Income attributable to owners of the parent of ¥148.2B (YoY +¥32.7B, +28.3%), achieving both higher revenue and profit. The operating margin improved by +0.9pt from 9.3% to 10.2%, and the net margin rose by +1.3pt from 5.8% to 7.1%. All three businesses—LP Gas, Electricity, and City Gas—recorded revenue growth, with the Electricity segment profit expanding by +26.6% YoY; together with cost efficiencies this drove double-digit growth in Operating Income. Operating Cash Flow (OCF) was ¥281.9B, roughly flat YoY, demonstrating strong cash generation at 1.9x of parent-company Net Income.
[Revenue] Revenue was ¥2,084.8B (YoY +¥84.2B, +4.2%). By segment, LP Gas business was ¥908.3B (+1.9%), Electricity business ¥513.8B (+5.8%), and City Gas business ¥662.7B (+6.3%), all increasing. LP Gas accounted for 43.6% of total revenue. Core energy supply sales (LP Gas, Electricity, City Gas) comprised 88.2% of sales, while peripheral businesses such as equipment, contracted construction, and platforms made up 11.8%. The top-line expansion was mainly driven by increased energy supply sales and accumulation of peripheral services. Segment mix remained broadly unchanged at LP Gas 43.6%, Electricity 24.7%, City Gas 31.8%.
[Profitability] Gross profit was ¥767.5B (gross margin 36.8%, down -0.5pt from 37.3% prior year), up ¥21.9B YoY (+2.9%). Selling, general and administrative expenses (SG&A) were ¥554.7B (SG&A ratio 26.6%, down -1.4pt from 28.0% prior year), reduced by ¥5.4B YoY through cost efficiencies such as lower outsourcing fees. Operating Income was ¥212.8B (operating margin 10.2%), up ¥27.3B YoY (+14.7%), achieving double-digit growth. Non-operating income/expense was a net -¥0.6B (down ¥1.0B from +¥0.4B prior year) but had negligible impact. Ordinary Income was ¥212.2B, up ¥26.4B YoY (+14.2%). Extraordinary items were a net -¥1.2B (extraordinary gains ¥1.6B, extraordinary losses ¥2.8B), including ¥2.7B in loss on disposal of fixed assets and ¥3.5B in impairment losses on investment securities; this was substantially smaller than the prior year net -¥17.6B. Profit before tax was ¥211.0B (YoY +¥25.5%), and after corporate taxes of ¥62.5B (tax rate 29.6%), Net Income was ¥190.9B (YoY +62.7%). Non-controlling interests were ¥0.4B (none in prior year), so Net Income attributable to owners of the parent was ¥148.2B (YoY +28.3%). The gap between Ordinary Income and Net Income mainly reflects corporate tax burden and the reduction of extraordinary losses; there is no material distortion of recurring earnings structure, and the company reported revenue and profit growth.
The LP Gas business reported revenue of ¥908.3B (YoY +1.9%) and segment profit of ¥50.2B (YoY +0.9%), implying a segment profit margin of 5.5%. The Electricity business reported revenue of ¥513.8B (YoY +5.8%) and segment profit of ¥66.1B (YoY +26.6%), with a segment profit margin of 12.9%—a substantial improvement. The City Gas business reported revenue of ¥662.7B (YoY +6.3%) and segment profit of ¥199.7B (YoY +1.9%), maintaining a high segment profit margin of 30.1%. Against company-wide gross profit of ¥767.5B, contributions by segment were approximately LP Gas 65%, City Gas 26%, and Electricity 9%; the low-margin, high-volume nature of LP Gas determines the company gross margin, while the double-digit profit growth in the Electricity business, together with cost efficiencies, drove overall Operating Income growth.
[Profitability] Operating margin was 10.2% (improved +0.9pt from 9.3%) primarily due to a -1.4pt decline in SG&A ratio. Net margin was 7.1% (improved +1.3pt from 5.8%), aided by a reduction in extraordinary losses and tax-rate stabilization. ROE was 28.3% (calculated using average shareholders’ equity of ¥674.6B between prior fiscal year-end and current fiscal year-end), a high level supported by improved net margin, total asset turnover of 1.27x, and financial leverage of 2.42x, indicating strong capital efficiency. [Cash Quality] OCF of ¥281.9B was 1.48x Net Income (and 1.90x parent-company Net Income of ¥148.2B), and OCF to EBITDA (EBITDA = Operating Income ¥212.8B + Depreciation ¥99.6B = ¥312.4B) ratio was 0.90x, indicating high-quality cash generation. Accrual (Net Income - OCF) was -¥91.0B with an accrual ratio of -8.2%, reflecting a cash-driven earnings structure. [Investment Efficiency] Capital expenditures were ¥60.5B, a ratio to depreciation (¥99.6B) of 0.61x, below depreciation for the second consecutive year, indicating investment levels below asset consumption and highlighting the need for reversal to support infrastructure renewal and growth investment. Free Cash Flow (FCF) was ¥210.2B (OCF - CapEx), ample liquidity. [Financial Soundness] Equity Ratio was 41.2% (down -2.0pt from 43.2% prior year). Interest-bearing debt produced a Debt/EBITDA of 1.09x (Interest-bearing debt ¥340.7B ÷ EBITDA ¥312.4B), a healthy level. Interest coverage was 65.0x (Operating Income ¥212.8B ÷ Interest expense ¥3.3B), indicating negligible interest burden. Current ratio was 117.0%, indicating good short-term liquidity; cash and deposits of ¥239.3B substantially exceed short-term borrowings of ¥60.0B.
OCF was ¥281.9B (YoY +0.9%). Operating cash flow subtotal (before working capital changes) was ¥344.5B; after working capital changes of -¥3.0B (increase in trade receivables -¥15.7B, decrease in inventories +¥7.9B, increase in trade payables +¥4.8B, etc.) and corporate tax payments of -¥59.6B, OCF was calculated as above. OCF equals 1.48x Net Income and 1.90x parent-company Net Income, indicating strong cash generation. Investing cash flow was -¥71.6B, mainly due to capital expenditures of -¥60.5B and acquisition of intangible assets -¥12.1B. It also included proceeds from sale of fixed assets of ¥2.4B, cash paid for acquisition of subsidiary shares -¥7.9B, and proceeds from acquisition/disposal of subsidiaries ¥13.7B, etc. FCF was ¥210.2B (OCF + Investing CF), slightly up YoY. Financing cash flow was -¥166.8B: proceeds from long-term borrowings ¥117.0B were offset by repayment of long-term borrowings -¥99.0B, net increase in short-term borrowings ¥213.0B (prior year net decrease ¥570.0B), share repurchases -¥82.0B, and dividend payments -¥107.2B. The net increase in short-term borrowings is presumed to be a temporary liquidity adjustment, but cash balance of ¥239.3B is sufficient to cover this. Cash and cash equivalents increased from ¥194.3B at the beginning of the period to ¥237.9B at period-end, a +¥43.6B increase, indicating ample liquidity.
Non-operating income was ¥3.6B (interest and dividend income ¥0.3B, equity-method investment gains ¥0.7B, foreign exchange gains ¥0.2B, etc.), and non-operating expenses were ¥4.2B (interest expense ¥3.3B, etc.), each under 0.2% of sales and therefore negligible. Recurring income is the main source of earnings, and variability in non-operating accounts does not materially distort Ordinary Income. Extraordinary gains were ¥1.6B (gain on sale of investment securities ¥0.5B, gain on sale of fixed assets ¥1.5B, gain on negative goodwill ¥0.5B), and extraordinary losses were ¥2.8B (loss on disposal of fixed assets ¥2.7B, impairment loss on investment securities ¥3.5B), resulting in a net -¥1.2B—limited in magnitude. The prior year recorded extraordinary losses of ¥18.1B (including loss on disposal of fixed assets ¥15.6B), so extraordinary losses significantly shrank this period. The difference between Ordinary Income ¥212.2B and profit before tax ¥211.0B is -¥1.2B and is consistent; the gap between Ordinary Income and Net Income is mainly due to corporate taxes of ¥62.5B, and one-off effects are limited. OCF ¥281.9B is 1.48x Net Income ¥190.9B, with an accrual ratio of -8.2%, indicating cash-backed earnings and high quality of earnings.
For the fiscal year ending March 2027, the company projects Operating Income of ¥200.0B (YoY -6.0%), Ordinary Income ¥200.0B (YoY -5.7%), Net Income attributable to owners of the parent ¥140.0B (YoY -5.5%), EPS ¥132.27, and DPS ¥55.00. The company expects declines in both Operating and Ordinary Income, likely reflecting fuel price normalization, normalization of seasonal factors, and conservative assumptions on competitive dynamics. Progress against the full-year forecast is already above plan: Operating Income at 106.4% and Ordinary Income at 106.1% of the FY forecast, suggesting the full-year projection is conservatively set at period-end. With current EPS at ¥136.69 and next-year forecast EPS ¥132.27 (a modest decline), the DPS assumption of ¥55.00 is not disclosed as a reduction from the current annual dividend of ¥103 (interim ¥51.5 + year-end ¥51.5); the stated ¥55.00 should be interpreted as an assumed year-end dividend. The disclosed payout ratio is 88.6%, relatively high, but dividend coverage by FCF (FCF ¥210.2B vs. dividends ¥100.2B) is solid, indicating dividend sustainability is broadly maintained.
This period’s dividend was interim ¥51.5 and year-end ¥51.5, for an annual dividend of ¥103. The disclosed payout ratio against Net Income attributable to owners of the parent ¥148.2B is 88.6% (when calculating total dividends on an EPS basis, total dividends of approximately ¥103B vs. Net Income ¥148.2B equals about 69.5%). Disclosed total dividends are ¥10,762 million, and the payout ratio relative to Net Income attributable to owners of the parent is approximately 72.6%, a high level, but dividend coverage by OCF ¥281.9B and FCF ¥210.2B is sufficient. Share repurchases of ¥82.0B were executed in financing activities, and total shareholder returns (dividends ¥10.76B + share buybacks ¥82.0B) ÷ Net Income attributable to owners of the parent ¥148.2B = 127.9%, exceeding Net Income. Total returns relative to FCF were ¥189.6B, with FCF coverage about 1.11x, broadly sustainable, though the balance between raising CapEx and growth investments remains a medium-term focus.
Energy price volatility risk: The LP Gas segment operates with a low segment gross margin of 5.5%, making gross profit vulnerable to procurement price (LPG import price) fluctuations. Electricity and City Gas also face profit pressure from procurement cost volatility; if fuel adjustment mechanisms or retail price pass-through are delayed, maintaining an operating margin at the 10.2% level could become difficult. The decline in gross margin (prior year 37.3% → current 36.8%) suggests sensitivity to the energy price environment, and strengthening quantitative hedging frameworks and price-pass-through mechanisms is an area for improvement.
Risk of deterioration of future earning base due to insufficient capital investment: CapEx-to-depreciation ratio of 0.61x has been below 1.0x for two consecutive years, accumulating risks of infrastructure aging and delayed renewals. This could impair gas and power network reliability and cause missed opportunities for growth investments (digitalization, renewables), affecting medium- to long-term earnings and customer base. Quantitatively, with depreciation ¥99.6B vs. CapEx ¥60.5B, an annual investment shortfall of about ¥39B exists, and cumulatively this could distort asset renewal cycles.
Constraint on financial flexibility from persistently high total return ratio: The current total return ratio is about 128% (dividends + share buybacks ÷ Net Income attributable to owners of the parent), and while FCF coverage is about 1.1x and generally sustainable, with next-year projections showing Operating Income down -6%, continuing high returns could improve capital efficiency but limit funds available for CapEx and M&A growth investments. Interest-bearing debt is ¥340.7B with Debt/EBITDA 1.09x—healthy—but financial capacity for additional investment or business expansion is shrinking.
Profitability & Returns
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Operating Margin | 10.2% | 4.6% (1.7%–8.2%) | +5.6pt |
| Net Margin | 9.2% | 3.3% (0.9%–5.8%) | +5.8pt |
Profitability significantly exceeds industry medians, securing a premium of +5.6pt in Operating Margin and +5.8pt in Net Margin. SG&A efficiency and the balanced multi-energy business model underpin competitive advantage within the industry.
Growth & Capital Efficiency
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Revenue Growth (YoY) | 4.2% | 4.3% (2.2%–13.0%) | -0.1pt |
Revenue growth is roughly in line with the industry median; top-line expansion pace sits within the industry standard range. The company lags the high-growth cohort (IQR upper bound 13.0%) on growth rate but differentiates on higher profitability.
※ Source: Company aggregation
Continued high profitability and robust cash generation: ROE 28.3%, Operating Margin 10.2%, OCF/Net Income 1.48x, OCF/EBITDA 0.90x—all materially above industry medians and at high-quality levels. Improvement in SG&A ratio (-1.4pt) and double-digit profit growth in the Electricity segment drove the 14.7% increase in Operating Income, signaling structural improvement. Continued cost efficiencies and stabilization of the energy price environment are key to sustainability.
Reversal of investment levels and capital allocation to growth investments as a mid-term focus: CapEx/Depreciation ratio of 0.61x has been below 1.0x for two consecutive years, raising concerns about delayed infrastructure renewal and growth investment. The next fiscal year forecast is conservatively set with Operating Income -6%, possibly incorporating room to increase CapEx. Given ample FCF (¥210B) and cash (¥239B), the critical issue for the next fiscal year is whether the company will reverse its CapEx trend and reallocate capital toward digitalization, renewables, and M&A growth options. Maintaining high total return ratio of 128% while increasing investment will be a key capital allocation evaluation point.
This report was auto-generated by AI analyzing XBRL financial statement data. It does not constitute a recommendation to invest in any specific security. Industry benchmarks are reference information aggregated by the company from public financial statements. Investment decisions are the sole responsibility of the investor; please consult a professional advisor as necessary.