Nippon Gas (8174) Q3 2025 earnings summary

Executive summary

• 3Q results missed plan due to lower gas sales from high temperatures, but full-year operating income plan of ¥20.0B is unchanged, with downside risk from temperature fluctuations.

• Net sales for the nine months ended December 31, 2024, rose 2.1% YoY to ¥137,919 million, but operating income fell 11.5% to ¥8,446 million and profit attributable to owners of parent dropped 14.2% to ¥5,900 million.

• Net income target for FY is ¥14.0B, aiming for 20% ROE and 32% EPS growth YoY.

• The company is focusing on decarbonization, industry consolidation, and expanding bundled energy solutions, with M&A and platform sharing as key growth strategies.

• A significant leadership change occurred with the passing of the former Chairperson and Director in December 2024.

Financial highlights

• 3Q gross profit was ¥50,600 (almost flat YoY), with LP Gas and Electricity up but City Gas down due to slide lag; SG&A expenses increased by ¥0.9B YoY, mainly from IT investments.

• 3Q operating income was ¥8,446 million, down 11.5% YoY; net income for 3Q was ¥5,900 million.

• FY gross profit forecast is ¥74,600 million, with operating income of ¥20,000 million and net income of ¥14,000 million.

• Basic earnings per share for the period was ¥53.23, down from ¥60.65 a year earlier.

• Comprehensive income decreased 25.6% YoY to ¥5,291 million.

Outlook and guidance

• Full-year forecast (ending March 31, 2025): Net sales ¥200,000 million (+2.9% YoY), operating income ¥20,000 million (+14.7%), ordinary income ¥20,000 million (+13.6%), profit attributable to owners of parent ¥14,000 million (+29.3%), EPS ¥126.61.

• No revision to previously announced forecasts; actual results may differ due to temperature fluctuations and other factors.

• 4Q is expected to see higher electricity profits and possible lower gas gross profits due to temperature.

• FY LP residential margin forecast at ¥229/kg; City Gas incorporates a negative slide lag impact in 4Q.