Tokyo Gas announces share purchases after H1 profits fall by 84% due to lower gas prices

Tokyo Gas, Japan’s largest city gas provider, posted a 17.2 billion yen (112 million dollars) net profit for the first half of this year to September. This is down 84% compared to the same period last year, due to lower gas prices in Japan and North America.

The utility has announced that it will buy back its own shares up to 40 billion Japanese yen, on top of the 40 billion yen already planned.

Taku Minami, CFO of the company, said at a press conference: "We chose to buy back additional shares to improve capital efficiency because our recent healthy earnings have resulted in an increase in retained profits."

He said that "the total return ratio including dividends is expected to reach 64 percent this fiscal year." The company will continue to examine various measures in order to achieve its goal of achieving a return on Equity (ROE) around 8 percent for the next fiscal.

Minami explained that the drop in profit for the first half was due to smaller profits from its city gas operations due to lower prices of gas and higher fuel costs due to the depreciation of yen.

The company's contribution from overseas operations also fell, as it divested its upstream assets in Australia, and the lower U.S. Natural gas prices affected earnings.

The Japanese company purchased a Texas-based natural gases producer Rockcliff Energy for $2.7 billion late last year. It also bought ARM Energy Trading in North America a 49% stake.

The company maintained its net profit projection for the fiscal period ending March 2025 at 81 trillion yen.

(source: Reuters)