Osaka Gas raised its full-year sales forecast by ¥84bn to ¥2.25tn but left profit guidance untouched: operating profit ¥150bn, ordinary profit ¥190bn and net profit ¥145bn. The interim earnings release says gas selling prices under the fuel-cost adjustment system are expected to stay high, which lifts revenue.
Interim profit fell
For April to September, sales rose 6.9% to ¥1.03tn. Ordinary profit fell 21.6% to ¥82.7bn and profit attributable to owners of the parent fell 29.8% to ¥66.6bn. The company blames the delay before raw-material and fuel price changes reach selling prices, which it describes as a temporary factor. The release is not subject to auditor review.
How the lag works
The presentation says gas tariffs reflect raw-material costs up to five months late. Rising costs create lag losses, and falling costs create lag gains. The company estimates the lag cost ¥25.8bn in the half (gas ¥19.9bn, power ¥5.8bn). Excluding it, ordinary profit was ¥108.5bn, up ¥22.2bn.
For the full year, the company now puts the lag at a ¥36.0bn loss, against ¥7.0bn in July. Excluding it, ordinary profit guidance rises to ¥226.0bn from ¥197.0bn. The company credits its long-term LNG contracts, the Freeport LNG terminal and Australian upstream operations. These ex-lag figures are company estimates, not reported results.
The forecast assumes crude at $100 a barrel and ¥155 to the dollar for October to March, against $80 and ¥160 in July.
The full-year dividend plan stays at ¥130 a share, with ¥65 at the interim stage.