Nippon Gas (8174) Q1 2026 earnings summary

Executive summary

• Operating income for 1Q exceeded plan by ¥1.2B, driven by electricity growth and lower acquisition costs, with net income for 1Q ¥2.6B above plan and a FY net income forecast of ¥14.0B, aiming for a record profit for the fifth consecutive year.

• Net sales for the three months ended June 30, 2025, rose 2.8% YoY to ¥45,859 million, with significant profit growth at all levels due to a sharp reduction in SG&A expenses after a change in customer acquisition policy.

• Profit attributable to owners of parent increased 81.0% YoY to ¥2,631 million, and basic EPS rose to ¥24.12 from ¥13.03.

• Comprehensive income surged 174.5% YoY to ¥2,516 million.

Financial highlights

• 1Q operating income: ¥3.6B, up ¥1.5B YoY and ¥1.2B above plan; operating income grew 75.0% YoY to ¥3,655 million.

• 1Q gross profit: ¥17.0B, up ¥0.1B YoY, driven by LP gas and electricity; gross profit was up 0.5% YoY to ¥17,039 million.

• SG&A expenses in 1Q: ¥13.4B, down ¥1.4B YoY and ¥0.9B below plan, mainly due to lower acquisition costs and deferred expenses.

• Total assets decreased by 9.2% from the previous fiscal year-end to ¥141,658 million, mainly due to lower trade receivables and cash.

• Free cash flow dropped to ¥318 million from ¥3,578 million YoY.

Outlook and guidance

• FY operating income plan remains at ¥20.0B, unchanged despite 1Q outperformance; full-year forecast for FY ending March 31, 2026, projects operating income and ordinary income at ¥20,000 million, and profit attributable to owners of parent at ¥14,000 million.

• The six-month forecast was revised upward, with operating and ordinary income now expected at ¥4,700 million and profit attributable to owners of parent at ¥3,300 million.

• Dividend of ¥11.3B and share buyback of ¥9.0B planned for FY, with a total return ratio of 145%; FY2026 dividend forecast is ¥103.00 per share, up from ¥92.50 in FY2025.

• Anticipates high temperatures in winter and certain cost increases in 2-4Q.