April 25, 2024

Consolidated Financial Results Bulletin for the Fiscal Year Ended March 31, 2024 (J-GAAP)

Tokyo Gas Co., Ltd.

Securities code:

9531

Stock listings:

(URL https://www.tokyo-gas.co.jp/en/IR/index.html)

Tokyo Stock Exchange, Nagoya Stock Exchange

Representative:

Mr. SASAYAMA Shinichi, Representative

Corporate Executive Officer, President and CEO

Contact:

Mr. KOMORI Rikiya, Chief Manager,

Location of head office: Tokyo

Consolidated Settlements Sect.

General shareholders' meeting schedule:

June 27, 2024

Scheduled date of the filing of securities report:

June 27, 2024

Scheduled date of the start of dividend payments:

June 6, 2024

Preparation of earnings presentation material (yes/no):

Yes

Holding of earnings announcement (yes/no):

Yes (for institutional investors)

(Amounts are rounded down to the nearest million yen)

1. Consolidated Performance for FY2023 ended March 31, 2024 (from April 1, 2023 to March 31, 2024)

(Unit: million yen)

(1) Consolidated Business Performance

(% of change from the corresponding period of previous year)

Net sales

Operating profit

Ordinary profit

Profit attributable to

owners of parent

FY2023 ended

2,664,518

-19.0%

220,308

-47.7%

228,179

-44.2%

169,936

-39.5%

Mar. 31, 2024

FY2022 ended

3,289,634

52.7%

421,477

230.5%

408,846

199.6%

280,916

193.5%

Mar. 31, 2023

Note: Total comprehensive income

FY2023 ended March 31, 2024: 281,162 million yen (-21.5%)

FY2022 ended March 31, 2023: 358,130 million yen (238.4%)

Diluted profit

Ratio of profit to

Ratio of

Ratio of

Profit per share

ordinary profit to

operating profit to

per share

shareholders' equity

total assets

net sales

FY2023 ended

411.88 yen

-

10.4%

6.1%

8.3%

Mar. 31, 2024

FY2022 ended

646.99 yen

-

20.0%

12.1%

12.8%

Mar. 31, 2023

Reference: Profit or loss on investment accounted for by equity method

FY2023 ended March 31, 2024: 3,061 million yen

FY2022 ended March 31, 2023: -4,450 million yen

(2) Consolidated Financial Position

(Unit: million yen)

Total assets

Total net assets

Equity ratio

Net assets per share

As of Mar. 31, 2024

3,888,855

1,733,218

43.6%

4,249.83

yen

As of Mar. 31, 2023

3,581,425

1,589,301

43.5%

3,595.60

yen

Reference: Shareholders' equity

As of March 31, 2024: 1,695,747 million yen

As of March 31, 2023: 1,558,404 million yen

(3) Consolidated Cash Flows

(Unit: million yen)

Cash flows from

Cash flows from

Cash flows from

Cash and cash equivalents

operating activities

investing activities

financing activities

at end of period

FY2023 ended

331,210

-362,014

-73,214

363,890

Mar. 31, 2024

FY2022 ended

487,030

-203,522

-22,403

453,432

Mar. 31, 2023

2. Dividend

Dividend per share (Unit: yen)

Total dividend

Dividend

payments

Payout ratio

End of

End of

End of

End of

on equity

Full-year

(Full-year)

(Consolidated)

(Consolidated)

1Q

2Q

3Q

4Q

(Unit: million yen)

FY2022 ended

-

32.50

-

32.50

65.00

28,186

10.0%

2.0%

Mar. 31, 2023

FY2023 ended

-

32.50

-

37.50

70.00

28,407

17.0%

1.8%

Mar. 31, 2024

FY2024 ending

-

35.00

-

35.00

70.00

-

Mar. 31, 2025 (Forecast)

3. Consolidated Results Forecast for FY2024 ending March 31, 2025 (April 1, 2024 - March 31, 2025)

(Unit: million yen)

(% of change from the corresponding

period of previous year)

Net sales

Operating profit

Ordinary profit

Profit attributable to

Profit per

owners of parent

share

Full-year

2,642,000

-0.8%

113,000

-48.7%

111,000

-51.4%

80,000

-52.9%

205.40

*Notes

  1. Significant changes in consolidated subsidiaries (changes in specified subsidiaries resulting in change of scope of consolidation during the year) (yes/no): Yes
    Newly included: 4 (names) Rockcliff Energy II LLC (note 1), Rockcliff Energy Operating LLC (note 2), TGAM Trading, LLC, TGARM Investment, LLC
    Excluded: 2 (names) TGBI 1. LLC, TG Barnett Resources LP

Notes: 1. Rockcliff Energy II LLC has been renamed TGNR Intermediate Holdings LLC, effective April 1, 2024. 2. Rockcliff Energy Operating LLC has been renamed TGNR East Texas II LLC, effective April 1, 2024.

Reference: Scope of consolidation and application of equity method

Number of consolidated subsidiaries: 104 (Increased by 14 companies and decreased by 12 companies)

Number of subsidiaries and affiliates accounted for by equity method: 23 (Increased by 9 companies and decreased by 1 company)

  1. Change in accounting policies or estimates and retrospective restatements
    1. Change in accounting policies in accordance with revision of accounting standards: No
    2. Change in accounting policies other than item 1) above: No
    3. Change in accounting estimates: No
    4. Retrospective restatements: No
  3. Number of issued shares (common stock)

(Unit: share)

1)

Number of issued shares at end of

Mar. 31, 2024

400,452,159

Mar. 31, 2023

434,875,059

period (including treasury stock):

2)

Number of shares of treasury stock

Mar. 31, 2024

1,436,376

Mar. 31, 2023

1,455,205

at end of period:

3)

Average number of shares during

Apr. 2023- Mar.2024

412,584,717

Apr. 2022- Mar.2023

434,188,168

period:

(Reference)

1. Non-Consolidated Business Results for FY2023 ended March 31, 2024 (April 1, 2023 - March 31, 2024)

(1) Non-Consolidated Business Performance

(Unit: million yen) (% of change from the corresponding period of previous year)

Net sales

Operating profit

Ordinary profit

Net income

FY2023 ended

2,376,447

-20.8%

126,258

-58.1%

155,575

-48.8%

124,300

-39.4%

Mar. 31, 2024

FY2022 ended

2,999,878

55.3%

301,426

480.6%

303,621

532.8%

205,171

442.9%

Mar. 31, 2023

Profit per share

Diluted profit

per share

FY2023 ended

301.27 yen

-

Mar. 31, 2024

FY2022 ended

472.54 yen

-

Mar. 31, 2023

(2) Non-Consolidated Financial Position

(Unit: million yen)

Total assets

Total net assets

Equity ratio

Net assets per share

As of Mar. 31, 2024

2,698,141

980,081

36.3%

2,456.25 yen

As of Mar. 31, 2023

2,696,080

991,764

36.8%

2,288.23 yen

Reference: Shareholders' equity

As of March 31, 2024: 980,081 million yen

As of March 31, 2023: 991,764 million yen

  • Quarterly review procedures by a certified public accountant or an audit firm do not apply to quarterly consolidated financial results bulletins.
  • Explanation related to appropriate use of results forecasts and other items warranting special mention
  1. Earnings forecasts involve significant uncertainties, including the impact of the situation between Russia and Ukraine. Forecasts may vary significantly depending on future developments.
    For details of the above forecasts, please refer to "1. Overview of Business Performance, etc. (2) Future outlook" on page 6 of the Attachment.
  2. The information related to this Financial Results will be posted on the Web site of the Company.

Contents of Attachment

I. Overview of Business Performance, etc

2

(1)

Overview of business performance and financial position of FY2023

2

(2)

Future outlook

6

(3)

Basic policy on profit sharing and dividends for FY2023 and FY2024

7

II. Basic Concept Regarding Selection of Accounting Standards

7

III. Consolidated Financial Statements and Main Notes

8

(1)

Consolidated balance sheets

8

(2)

Consolidated statements of income and comprehensive income

10

(Consolidated statement of income)

10

(Consolidated statement of comprehensive income)

11

(3)

Consolidated statements of changes in equity

12

(4)

Consolidated statements of cash flows

16

(5)

Notes on consolidated financial statements

18

1)

(Note on going concerns' premise)

18

2)

(Additional information)

18

3)

(Changes in presentation)

19

4)

(Segment information, etc.)

21

5)

(Per share information)

24

6)

(Material subsequent events)

25

IV. Non-Consolidated Financial Statements

26

(1)

Balance sheets

26

(2)

Statements of income

28

1

  1. Overview of Business Performance, etc.
  1. Overview of business performance and financial position of FY2023 (Business performance of FY2023)
    During the fiscal year under review, Japan's economy recovered moderately on the back of a recovery trend in capital expenditures, although weakness remained in some areas of consumer spending and exports. The economy is expected to continue to recover moderately as a result of various policy measures and as the employment and income environment improves. Nevertheless, the economic outlook requires close attention due to recent price increases, the situation in the Middle East, and fluctuations in financial and capital markets.
    In addition, the environment surrounding the Group has undergone significant changes, such as the emergence of a global trend toward decarbonization and digitalization. Regarding decarbonization, the development of an environment for green transformation investment by the public and private sectors is progressing, and related innovations are entering the social implementation phase. In terms of digitalization, the use of generative AI and other technologies for business is advancing rapidly. Customer values are diversifying along with these social changes, ushering in an era in which we can no longer meet customer needs by providing products and services in the same way as before.
    The year 2023 marked the first year of the Group's current Medium-term Management Plan, Compass Transformation 23-25.
    In light of such changes of business environment, we have implemented diverse actions under our three core
    strategies, focusing on green transformation (GX), digital transformation (DX), and customer experience (CX). The core strategies are "Achieving both stable energy supply and decarbonization", "Fully rolling out Solutions business" and "Realize a flexible corporate culture resilient to change".
    In the fiscal year under review, the Energy Solution segment saw a decrease in city gas sales volume to industrial customers mainly as a result of lower demand from customers that use gas for power generation. In electric power sales, while the retail sales volume increased due to a higher number of contracts, the sales volume of wholesale, etc. dropped due to a decline in demand from wholesale customers.
    In the Network segment, third-party access revenue was affected by high temperatures. In the Overseas segment, the balance of income and expenses deteriorated, primarily reflecting a drop in selling prices in the LNG business in Australia and North America owing to a global decline in market prices. In the Urban Development Segment, Profit from real estate sales increased.
    Reflecting these economic conditions and changes in the business climate, consolidated net sales totaled ¥2,664.5 billion, down 19.0% year on year, and operating expenses were ¥2,444.2 billion, down 14.8% year on year.
    Consequently, operating profit was ¥220.3 billion, down 47.7% year on year, and ordinary profit totaled ¥228.1 billion, down 44.2% year on year. Meanwhile, profit attributable to owners of the parent came to ¥169.9 billion, down 39.5% year on year after recording the following: extraordinary income of ¥25.1 billion in gain on sales of investment securities and ¥2.2 billion in gain on the valuation of long-term loans as extraordinary income; extraordinary losses of ¥3.4 billion in impairment loss; and income taxes.
1) Energy solution

Segment sales decreased by ¥639.7 billion to ¥2,422.8 billion, mainly due to a decrease in unit sales price owing to resource cost adjustments and a drop in electric power sales.

Operating expenses stood at ¥2,223.2 billion, owing in part to a downward trend in crude oil prices from the previous fiscal year.

Accordingly, operating profit of the segment decreased by ¥161.6 billion to ¥200.8 billion. (Gas)

The sales volume of city gas was 11,303 million m3, down 10.1% year on year. This includes residential demand of 2,724 million m3, which decreased 2.8% year on year due to lower demand for hot water supply caused by high temperatures. Commercial demand increased 2.3% year on year to 2,275 million m3 due to an increase in demand for air conditioning owing to high temperatures.

Industrial demand fell 20.1% year on year to 4,741 million m3 due to a slowdown in user operations.

Supply to other utilities decreased 3.2% year on year to 1,563 million m3 due to a decline in operations of other utilities.

2

FY2023

FY2022

Change

% change

No. of customers for city

Thousands

8,789

8,701

88

1.0

gas retail sales

No. of customers (meters)

Thousands

12,451

12,331

120

1.0

volume

Residential

Mil. m3

2,724

2,802

-78

-2.8

Commercial

Mil. m3

2,275

2,224

51

2.3

sales

Industrial

Mil. m3

4,741

5,932

-1,191

-20.1

Subtotal

Mil. m3

7,016

8,156

-1,140

-14.0

gas

Supplies to other utilities

Mil. m3

1,563

1,616

-53

-3.2

City

Total

3

11,303

12,574

-1,271

-10.1

Mil. m

Average temperature

°C

17.5

16.8

0.7

-

Notes:

  1. No. of customers for city gas retail sales indicates the number of billed customers for city gas retail sales.
  2. The number of installed meters is the number of meters installed as a gas pipeline operator.
  3. "Commercial" indicates sales to commercial, public and medical institutions.
  4. City gas sales volumes are on the basis of 45MJ/m3.

¥/$ rate

FY2023

FY2022

Change

144.58

135.50

9.08

Crude oil

price

($/bbl)

FY2023

FY2022

Change

85.97

102.73

-16.76

(Electric power)

FY2023

FY2022

Change

% change

No. of customers for

Thousands

3,871

3,475

396

11.4

electric power retail sales

Electric

Retail

million kWh

13,439

12,019

1,420

11.8

power

Wholesale etc.

million kWh

12,040

22,426

-10,386

-46.3

sales

Total

million kWh

25,479

34,445

-8,966

-26.0

volume

Note: No. of customers for electric power retail sales indicates the number of billed customers for electric power retail sales.

2) Network

Sales decreased by ¥10.4 billion year on year to ¥326.4 billion. Operating expenses were ¥330.4 billion. Segment profit/loss was a loss of ¥3.9 billion, down ¥9.8 billion from the previous fiscal year.

3) Overseas

Sales decreased by ¥39.9 billion year on year to ¥120.0 billion. Operating expenses were ¥90.2 billion.

Segment profit was ¥30.8 billion, down ¥37.1 billion year on year, as a result of posting the share of profit of entities accounted for using the equity method.

4) Urban development business

Sales increased by ¥28.5 billion year on year to ¥91.1 billion. Operating expenses were ¥68.8 billion.

Segment profit was ¥22.9 billion, up ¥7.8 billion year on year, as a result of posting the share of profit of entities accounted for using the equity method.

3

(Unit: million yen )

Energy solution

Network

Overseas

Urban development

FY2023

2,422,873

326,459

120,021

91,113

(% of total)

(81.8％)

(11.0％)

(4.1％)

(3.1％)

Sales

FY2022

3,062,554

336,812

159,912

62,676

(% of total)

(84.6％)

(9.3％)

(4.4％)

(1.7％)

Amount of change

-639,681

-10,353

-39,891

28,437

(Rate of change)

(-20.9％)

(-3.1％)

(-24.9％)

(45.4％)

FY2023

2,223,299

330,418

90,265

68,897

(% of total)

(82.0％)

(12.2％)

(3.3％)

(2.5％)

Operation

FY2022

2,699,963

330,818

86,866

48,283

expenses

(% of total)

(85.4％)

(10.4％)

(2.7％)

(1.5％)

Amount of change

-476,664

-400

3,399

20,614

(Rate of change)

(-17.7％)

(-0.1％)

(3.9％)

(42.7％)

FY2023

200,812

-3,959

30,846

22,946

(% of total)

(80.1％)

(-1.6％)

(12.3％)

(9.2％)

Segment

FY2022

362,491

5,993

67,911

15,177

profit/loss

(% of total)

(80.3％)

(1.3％)

(15.0％)

(3.4％)

Amount of change

-161,679

-9,952

-37,065

7,769

(Rate of change)

(-44.6％)

-

(-54.6％)

(51.2％)

Notes: 1. Figures for sales include internal transactions. Figures for operating expenses do not include expenses that cannot be allocated to specific segments.

  1. Figures for segment profit/loss are operating profit plus or minus the share of profit/loss of entities accounted for using the equity method.
  2. Due to a review of our system for providing services to regional administrations and local governments, we have transferred some of the businesses previously included in the Network segment to the Energy Solutions segment or to the corporate business, effective from the consolidated fiscal year under review. Note that the segment information for the previous consolidated fiscal year is presented based on the reporting segment classification after the above segment changes.

4

(Financial position in FY2023)

1) Situation of assets, debt and net assets

Assets increased by ¥307.4 billion from the end of the previous consolidated fiscal year to ¥3,888.8 billion due mainly to an increase in mining rights as a result of the acquisition of Rockcliff Energy II LLC.

Liabilities increased by ¥163.5 billion to ¥2,155.6 billion due in part to an increase in interest-bearing debt mainly due to corporate bonds and long-term borrowings.

Net assets increased by ¥143.9 billion to ¥1,733.2 billion due to an increase in shareholders' equity, partly as a result of the posting of profit attributable to owners of the parent, and an increase in accumulated other comprehensive income, offsetting the distribution of capital surplus, the acquisition of treasury shares, and other factors.

Since the growth rate of equity capital (the sum of shareholders' equity and accumulated other comprehensive income) was higher than the growth rate of total assets, the equity ratio increased by 0.1 percentage points to 43.6% compared to the end of the previous consolidated fiscal year.

(Unit: hundred million yen)

FY2023

FY2022

Change

% change

Energy solution

688

778

-90

-11.6

Network

807

816

-9

-1.1

Overseas

403

304

99

32.6

Urban development

158

245

-87

-35.6

Adjustments

-5

-12

7

-

Total

2,052

2,132

-80

-3.8

2) Situation of cash flow

(Unit: hundred million yen)

FY2023

FY2022

Change

Cash flow from operating activities

3,312

4,870

-1,558

Cash flow from investing activities

-3,620

-2,035

-1,585

Cash flow from financing activities

-732

-224

-508

Cash and cash equivalents at end of year

3,638

4,534

-896

a) Cash flow from operating activities

Cash and cash equivalents obtained as a result of operating activities totaled ¥331.2 billion. Cash and cash equivalents increased mainly due to the posting of income before income taxes (¥252.0 billion) and depreciation and amortization (¥208.2 billion), despite payments for corporate income taxes (-¥172.0 billion), etc.

b) Cash flow from investing activities

Cash and cash equivalents used in investing activities totaled ¥362.0 billion. Cash and cash equivalents decreased mainly due to the purchase of subsidiary shares resulting in a change in the scope of consolidation (-¥219.9 billion), the purchase of property, plant and equipment associated with capital expenditure (-¥180.7 billion), despite proceeds from sale of subsidiary shares resulting in a change in the scope of consolidation (¥89.3 billion) , etc.

c) Cash flow from financing activities

Cash and cash equivalents used in financing activities totaled ¥73.2 billion. Cash and cash equivalents decreased mainly due to repayments of long-term borrowings (-¥154.9 billion), the purchase of treasury shares (-¥113.0 billion), and dividends paid (-¥27.5 billion), despite proceeds from long-term borrowings (¥148.5 billion), decrease in net increase in commercial papers (¥77.0 billion).

5

(2) Future outlook

In FY2024, which ends March 31, 2025, we forecast city gas sales volume to total 11,422 million m3, an increase of 1.1% versus FY2023, due to an expected increase in residential demand and an expected growth in industrial demand from power generation customers, although we expect demand for air conditioning from commercial customers to decline, as we set our temperature forecast to be in line with an average year. We forecast electric power sales volume to decrease 5.6% year on year to 24,060 million kWh, mainly due to a drop in sales volume to wholesalers. Net sales are expected to decrease by 0.8% year on year, reflecting a decline in the unit sales price in conjunction with resource cost adjustments and a drop in electric power sales volume. Meanwhile, operating expenses are expected to increase primarily due to an increase in depreciation in the overseas business.

Taking these factors into account, we forecast consolidated net sales of ¥2,642.0 billion, a decrease of ¥22.5 billion or 0.8% year on year, operating profit of ¥113.0 billion, a fall of ¥107.3 billion or 48.7% year on year, ordinary profit of ¥111.0 billion, a drop of ¥117.1 billion or 51.4% year on year, and profit attributable to owners of the parent of ¥80.0 billion, a decline of ¥89.9 billion or 52.9% year on year.

The economic frame assumed for FY2024 is ¥145/$ for foreign exchange rate for the full-year, and $80/bbl for the full- year for crude oil price.

a. Consolidated city gas sales volume forecast for FY2024

FY2024

FY2023

Change

% change

(Forecast)

(Results)

City gas

Residential

Mil. m3

2,816

2,724

92

3.4

sales

Others

Mil. m3

8,606

8,579

27

0.3

volume

Total

Mil. m3

11,422

11,303

119

1.1

Average temperature

°C

16.4

17.5

-1.1

-

b. Consolidated electric power sales volume forecast for FY2024

FY2024

FY2023

Change

% change

(Forecast)

(Results)

Total electric power

million kWh

24,060

25,479

-1,419

-5.6

sales volume

c. Consolidated earnings forecast for FY2024

(Unit: hundred million yen)

Net sales

Operating profit

Ordinary profit

Profit attributable to

owners of parent

FY2024 (forecast)

26,420

1,130

1,110

800

FY2023 (results)

26,645

2,203

2,281

1,699

Change

-225

-1,073

-1,171

-899

% change

-0.8%

-48.7%

-51.4%

-52.9%

< Foreign exchange rate and crude oil price forecast for FY2024>

FY2024

FY2023

Change

Crude oil

FY2024

FY2023

Change

¥/$ rate

(Forecast)

(Results)

price

(Forecast)

(Results)

145.00

144.58

0.42

($/bbl)

80.00

85.97

-5.97

6

(3) Basic policy on profit sharing and dividends for FY2023 and FY2024

The Company allocates its management results to the improvement of customer service and realization of a sustainable society, as well as sharing them with shareholders in an appropriate and timely manner. Our basic dividend policy is to maintain stable dividends while at the same time offering gradual dividend increases in accordance with profit growth by comprehensively taking into consideration medium- to long-term profit levels.

The Company revised its Articles of Incorporation on June 29, 2021. Owing to a resolution approved by the Board of Directors, it is now possible for the Company to set a dividend. As of the Board of Directors held of April 25, 2024, the Board has set the per-share dividend at ¥37.50. Reflecting this, the annual dividend per share will be ¥70 for FY2023, including an interim dividend of ¥32.50.

The dividend forecast for FY2024 is an annual dividend of ¥70 per share (including interim dividend of ¥35).

II. Basic Concept Regarding Selection of Accounting Standards

The Tokyo Gas Group prepares consolidated financial statements based on Japanese standards in consideration of comparability of consolidated financial statements between companies. It intends to respond appropriately regarding the application of IFRS, taking into account the situations in both Japan and abroad.

7

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Tokyo Gas Co. Ltd. published this content on 25 April 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 25 April 2024 06:52:03 UTC.