Tokyo Gas expects net profit to nearly double in FY25/26

Tokyo Gas aims to nearly double its net profit in the 2025/26 fiscal year and plans to expand in the United States, Japan's biggest city gas provider said on Wednesday.

The company said it expects net profit to grow to 131 billion yen ($871 million) in the 2025/2026 fiscal year, which begins on April 1, from 72 billion yen for the year ending this month. It sees its dividend rising by 10 yen to 80 yen per share in the current fiscal year.

It also plans a new share buyback of up to 120 billion yen in the first half of the 25/26 fiscal year, it said.

Tokyo Gas said it wants to increase coordination between its liquefied natural gas trading and shale gas businesses in the United States and expand there, while also building its LNG trading worldwide, mainly through Singapore and London.

"Our shale gas business is expected to become a major profit pillar in FY25/26," the company's statement said.

The company also outlined its basic policy for formulating a new 3-year business plan starting in April 2026.

During this period, it aims to invest over 1.1 trillion yen and plans shareholder returns of over 200 billion yen. It may also sell around 100 billion yen worth of real estate, it said.

Tokyo Gas, which acquired U.S.-based natural gas producer Rockcliff Energy in 2023, plans to spend at least $1.9 billion on its U.S. shale business during the three years to March 2029.

"By concentrating in the Haynesville area, we have been able to lower costs by sharing pipelines, making us one of the most cost competitive in the region," President Shinichi Sasayama told a press conference, adding that it may consider investing in promising shale gas assets in North America.

Asked about interest in buying LNG from the Alaska LNG project, Sasayama declined to comment, citing a lack of details such as pricing and contract conditions.

He said decisions on real estate sales in Japan would be based on synergies with the energy business and overall economic viability but gave no specific examples of potential asset sales.

Sasayama also declined to comment on U.S. activist investor Elliott Management, which bought a 5.03% stake in Tokyo Gas and has urged it to divest parts of its extensive real estate portfolio to boost shareholder value.

Tokyo Gas shares closed 2% down in Tokyo.

($1 = 150.4700 yen)