Osaka Gas (9532) Q2 2025 earnings summary

Executive summary

• Net sales and profits declined year-over-year in 2Q FY2025.3, mainly due to lower LNG sales and reduced city gas prices in Domestic Energy.

• Operating profit dropped 43.2% year-over-year to ¥54.9 billion, and profit attributable to owners of parent fell 43.1% to ¥50.7 billion, reflecting a reduced positive impact from the time lag in raw material cost adjustments.

• Revised full-year forecasts maintain previous profit and sales guidance, with segment adjustments reflecting market and operational changes.

• Management is focused on improving ROE and capital efficiency, targeting 8% ROE by FY2027.3 and executing a ¥20 billion share buyback.

• Comprehensive income decreased 24.3% year-over-year to ¥129.5 billion.

Financial highlights

• 2Q FY2025.3 net sales: ¥950.1B (down ¥45.5B, -4.6% YoY); ordinary profit: ¥71.8B (down ¥51.9B, -42.0% YoY); EPS: ¥125.0 (down ¥89.9 YoY).

• Operating profit: ¥54.9B (down ¥41.7B, -43.2% YoY); profit attributable to owners: ¥50.7B (down ¥38.5B, -43.1% YoY).

• FY2025.3 full-year forecast: net sales ¥1,986.0B, ordinary profit ¥153.0B, profit attributable to owners ¥112.0B, EPS ¥276.64.

• Annual dividend forecast raised to ¥95.0/share (up ¥12.5 YoY).

• EBITDA for 2Q: ¥130.7B (down ¥35.0B YoY); NOPAT: ¥53.0B (down ¥38.5B YoY).

Outlook and guidance

• No change to full-year sales or profit forecasts from previous guidance; segment profit mix adjusted for market and operational factors.

• Domestic Energy profit expected to rise due to reserve market gains; International Energy profit to fall due to Freeport LNG outage.

• Net sales and profits expected to decrease YoY due to absence of prior year’s one-time FX gains and lower time-lag profit.

• Full-year forecast (ending March 31, 2025): net sales ¥1,986.0B (-4.7% YoY), operating profit ¥123.5B (-28.4%), ordinary profit ¥153.0B (-32.5%), profit attributable to owners ¥112.0B (-15.6%), EPS ¥276.64.

• Dividend forecast for FY2025: annual ¥95.00 per share (interim ¥47.50, year-end ¥47.50).