SHIZUOKA GAS CO.,LTD. FY2025 Q3 Earnings Report

Financial Highlights

• Net Sales: ¥151.20B
• Operating Income: ¥12.93B
• Net Income: ¥8.70B
• EPS: ¥122.56

Income Statement

Balance Sheet

Profitability Ratios

Year-over-Year Comparison

Share Information

Dividend Information

Full Year Forecast

Disclaimer

This data was automatically extracted from XBRL files. Please refer to the original disclosure documents for accuracy.

AI Financial Analysis

Executive Summary

Shizuoka Gas Co., Ltd. (TSE:9543) reported FY2025 Q3 consolidated results under JGAAP with revenue of ¥151.2bn (-1.1% YoY) and operating income of ¥12.9bn (+23.8% YoY), indicating meaningful margin expansion despite a slight top-line contraction. Gross profit was ¥31.9bn, translating to a gross margin of 21.1%, which is solid for a regulated/semiregulated gas utility context and likely reflects favorable input cost dynamics and pricing pass-through normalization. Operating margin improved to approximately 8.6% (¥12.93bn/¥151.20bn), underpinning the strong YoY growth in operating income. Ordinary income was ¥13.0bn and net income reached ¥9.23bn (+14.8% YoY), with EPS of ¥122.56. The DuPont framework shows a net margin of 6.10%, asset turnover of 0.83x, and financial leverage of 1.35x, yielding an ROE of 6.83%. Using the reported tax and net income, the implied effective tax rate is about 26.5% (¥3.32bn / (¥9.23bn + ¥3.32bn)), even though a 0.0% effective tax rate appears in the provided calculated metrics. The balance sheet is conservative: total assets were ¥182.23bn against total liabilities of ¥44.68bn and equity of ¥135.08bn, implying an equity ratio of roughly 74.1% (calculated), a current ratio of 324.5%, and a quick ratio of 319.8%. Leverage is modest with a debt-to-equity proxy of 0.33x (total liabilities/total equity), and interest expense was only ¥0.11bn, yielding an interest coverage ratio of 118.6x. Working capital is ample at ¥53.64bn, and inventories are low at ¥1.13bn, consistent with a service/utility model. Cash flow statements (OCF/ICF/FCF) and D&A are not disclosed in this dataset; therefore, EBITDA-related metrics and cash conversion analysis cannot be validated. Despite the lack of cash flow disclosure, earnings quality is supported by the wide spread between operating income and interest expense. Revenue softness alongside profit growth suggests cost normalization (e.g., fuel cost pass-through effects) and operating leverage contributing to earnings resilience. ROE at 6.83% is moderate, consistent with a low-risk balance sheet and the capital intensity typical of gas utilities. Dividend information (DPS) is not disclosed here; therefore, payout and FCF coverage cannot be assessed from this dataset. Overall, Shizuoka Gas exhibits robust operating performance, strong liquidity, and low financial risk, with improving margins and stable profitability, while data limitations constrain cash flow and dividend assessments.

Profitability Analysis

ROE_decomposition: ROE 6.83% = Net margin 6.10% x Asset turnover 0.83x x Financial leverage 1.35x. This implies ROA of roughly 5.07% (NI/Assets) and moderate balance-sheet leverage. margin_quality: Gross margin 21.1% and operating margin ~8.6% (¥12.93bn/¥151.20bn). Net margin at 6.10% reflects limited non-operating drag and a standard tax burden (~26.5% implied). Margin expansion YoY is evidenced by +23.8% operating income on -1.1% revenue. operating_leverage: Positive operating leverage is suggested by profit growth outpacing revenue. Likely drivers include lower fuel procurement costs and timing of pass-through mechanisms, alongside cost control.

Growth Assessment

revenue_sustainability: Revenue decreased slightly (-1.1% YoY to ¥151.2bn), consistent with potential normalization of commodity-linked selling prices and/or tempered demand. Sustainability will hinge on customer demand, tariff frameworks, and fuel cost trajectories. profit_quality: Operating income rose 23.8% to ¥12.93bn despite lower revenue, indicating improved unit economics and cost normalization. Interest expense is minimal (¥0.11bn), so operating gains largely flow to the bottom line. outlook: With stable ordinary income (¥12.98bn) and implied tax rate near mid-20s, full-year profitability appears supported by stronger margins. Near-term growth will be sensitive to fuel price/FX trends, weather-driven demand, and regulatory pass-through timing.

Financial Health

liquidity: Current assets ¥77.53bn vs current liabilities ¥23.89bn implies a current ratio of 324.5% and a quick ratio of 319.8%, indicating ample near-term liquidity. Working capital stands at ¥53.64bn. solvency: Total liabilities ¥44.68bn vs equity ¥135.08bn yields a debt-to-equity proxy of 0.33x and an equity ratio of ~74.1% (calculated), underscoring a strong capital base. capital_structure: Financial leverage of 1.35x (assets/equity) and interest coverage of 118.6x reflect conservative funding and very low financing risk.

Cash Flow Quality

earnings_quality: Earnings quality appears solid given high interest coverage and stable ordinary income; however, the absence of OCF and D&A disclosure in this dataset limits validation of cash conversion and non-cash components. FCF_analysis: Free cash flow cannot be computed due to undisclosed OCF and capex (ICF not provided). For a utility, D&A and capex are typically material, and assessing maintenance vs growth capex is key but not possible here. working_capital: Working capital is sizeable at ¥53.64bn, with low inventories (¥1.13bn). Receivables and payables dynamics are not disclosed, so we cannot assess cash conversion cycle changes.

Dividend Sustainability

payout_ratio_assessment: DPS and payout ratio are not disclosed in this dataset (values shown as 0 indicate nondisclosure). With EPS at ¥122.56 and moderate ROE, there appears capacity for distributions, but actual payout cannot be assessed. FCF_coverage: Not assessable due to undisclosed OCF and capex; therefore, dividend coverage by FCF cannot be evaluated. policy_outlook: Utility sector norms often favor stable dividends, but without disclosed DPS, cash flows, or policy commentary, the outlook cannot be inferred from this dataset alone.

Risk Assessment

Business Risks:

• Fuel cost and FX volatility affecting gross margin and timing of pass-through adjustments
• Weather and temperature-driven demand fluctuations for city gas
• Competitive dynamics in retail energy and customer switching
• Regulatory/tariff framework changes impacting allowed margins
• Decarbonization transition risks, including demand erosion from electrification and hydrogen transition uncertainties
• Operational risks in pipeline integrity, safety, and outage management

Financial Risks:

• Potential increase in capex requirements leading to higher leverage over time
• Interest rate risk if refinancing needs rise from future investments
• Commodity hedging effectiveness and potential mark-to-market impacts on earnings
• Pension/asset-liability management risks (if applicable) affecting OCI/equity

Key Concerns:

• Limited disclosure of cash flow and D&A prevents assessment of cash conversion and capex intensity
• Slight revenue decline suggests sensitivity to price normalization and demand trends
• Visibility on dividend policy and payout is lacking in this dataset

Investment Implications

Key Takeaways:

• Strong margin expansion with operating income +23.8% YoY on -1.1% revenue
• Conservative balance sheet: equity ratio ~74%, D/E ~0.33x
• ROE 6.83% driven by 6.10% net margin and 0.83x asset turnover with low leverage
• High interest coverage (118.6x) indicates minimal financing risk
• Cash flow and D&A data not disclosed, constraining FCF and EBITDA analysis

Metrics to Watch:

• Fuel cost and FX trends vs tariff/pass-through timing
• OCF and capex disclosure for FCF and dividend coverage
• Volume trends (industrial/commercial/residential) and temperature-normalized demand
• Regulatory/tariff updates and competitive developments in retail energy
• ROE trajectory and capital efficiency as margins normalize

Relative Positioning: Within Japan’s gas utilities peer set, Shizuoka Gas appears conservatively capitalized with moderate ROE and improving margins; earnings resilience is supported by low financing costs, though comparative cash flow metrics cannot be assessed due to nondisclosure here.

Disclaimer

This analysis was auto-generated by AI. Please note the following:

• No Guarantee of Accuracy: The accuracy and completeness of this analysis are not guaranteed. For accurate financial data, please refer to the original disclosure documents published on TDnet or other official sources
• Not Investment Advice: This analysis is for general informational purposes only and does not constitute investment advice under applicable securities laws. It is not a recommendation to buy or sell any specific securities
• At Your Own Risk: Investment decisions should be made at your own discretion and risk. We assume no liability for any losses incurred based on this analysis