Tokyo Gas H1 profit drops 84% ​​due to lower gas prices, announces share buyback

TOKYO:Tokyo Gas, Japan’s largest city gas supplier, on Wednesday posted a net profit of 17.2 billion yen ($112 million) in the first half to the end of September, down 84 percent from the same period a year earlier, hit by lower gas prices at home and North America.

But the utility announced a new plan to buy back up to 40 billion yen of its own shares, in addition to an already planned buyback of 40 billion yen.

“We decided on the additional buybacks to improve capital efficiency as our healthy profits in recent years have led to an increase in retained earnings,” CFO Taku Minami told a news conference.

“The total return ratio, including dividends, is expected to reach 64 percent this financial year,” he said, adding that the company will continue to consider various measures to achieve its target of a return on equity (ROE) of around 8 percent . percent in the next financial year.

The decline in first-half profit was due to smaller profits from its main city gas business due to lower gas prices and higher fuel costs amid the yen’s depreciation, Minami said.

In addition, the contribution from overseas business declined as it divested upstream gas assets in Australia and lower natural gas prices in the US hurt earnings there.

The Japanese company late last year paid $2.7 billion to acquire Texas-based natural gas producer Rockcliff Energy and this year bought a 49 percent stake in a North American energy marketing and trading company, ARM Energy Trading.

The company maintained its net profit forecast for the fiscal year to the end of March 2025 at 81 billion yen.

($1 = 153.2700 yen)