Nippon Gas (8174) investor relations material

Executive summary

• Achieved record-high net sales of ¥208,480 million (up 4.2% YoY), operating income of ¥21.3B (up 15% YoY), and net income of ¥14.8B (up 28.3% YoY), with ROE at 22%.

• Customer base surpassed 2 million, with growth in all segments, especially LP Gas, Electricity, and City Gas, and increased bundled service adoption.

• Growth was driven by increased gross profit in electricity, equipment/construction, and platform businesses, alongside cost optimization and improved customer acquisition efficiency.

• Completed major logistics and IT infrastructure investments, supporting robust free cash flow and dividend increases.

Financial highlights

• Gross profit rose to ¥76.8B (+3% YoY), operating income to ¥21.3B (+15% YoY), and EPS to ¥136.7 (+31% YoY).

• SG&A expenses were ¥55.5B, in line with plan, and down 1.0% YoY.

• Dividend per share increased to ¥103.0, with a payout ratio of 75.4% and total shareholder return (dividends + buybacks) of ¥30.0B over three years.

• Free cash flow reached ¥21.0B, with cash and cash equivalents up ¥4.3B to ¥23.7B.

• Total assets grew 4.9% to ¥163.5B, while net assets remained stable at ¥67.4B; equity ratio declined to 40.9%.

Outlook and guidance

• Three-year plan targets operating income of ¥25.0B and net income of ¥17.5B by FYE 03/29.

• For FY ending March 2027, operating income is forecast at ¥20.0B (down 6.0% YoY) and net income at ¥14.0B (down 5.5% YoY), reflecting anticipated raw material price increases.

• Excluding the estimated ¥2.0B impact from raw material costs, operating income would be ¥22.0B and profit ¥15.4B.

• EPS projected to reach ¥165, with ROE and ROIC maintained around 22% and 13%, respectively.

• Plans to allocate over ¥36.0B to dividends and share buybacks over the next three years, with FY27 dividend forecast at ¥110.0 per share.