Toho Gas, the Nagoya-area city gas and electricity supplier, reported first-quarter sales of ¥144.8bn, down 10.3% from a year earlier, and operating profit of ¥7.64bn, down 61.5%. Net profit attributable to parent shareholders fell 43.3% to ¥9.42bn. The company says the main driver was not soft demand but a technical reversal: the lag between when Toho Gas books fuel costs and when it recovers them through customer tariffs under Japan's fuel-cost adjustment system flipped from a surplus to a loss during the quarter.
| Metric | Apr-Jun 2026 | Apr-Jun 2025 | Change |
|---|---|---|---|
| Net sales | ¥144.8bn | ¥161.5bn | -10.3% |
| Operating profit | ¥7.64bn | ¥19.8bn | -61.5% |
| Ordinary profit | ¥10.6bn | ¥22.0bn | -52.0% |
| Net profit (parent) | ¥9.42bn | ¥16.6bn | -43.3% |
Why the timing effect turned against the company
All-Japan CIF crude oil averaged $112.7 a barrel in the quarter, up $37.6 from a year earlier, while the yen averaged ¥159.6 to the dollar, about ¥15 weaker. Because city-gas rates pass through fuel costs with a delay, a fast rise in landed crude and LNG costs, amplified by yen weakness, creates a temporary mismatch that shows up as a paper loss before tariffs catch up. Gas sales volume also slipped 2.4% to 760 million cubic meters, with household demand down 7.3% on unusually warm April and May weather.
Where the profit actually went missing
The gas segment, which carries the fuel-cost adjustment mechanism, saw its profit drop from ¥16.1bn to ¥5.75bn, the single largest driver of the group-wide decline. The electricity segment swung to a ¥1.43bn loss from a ¥1.15bn profit a year earlier. The LPG and other-energy segment moved the other way, improving to ¥1.26bn from ¥554mn.
Guidance holds, but the assumptions are doing the work
Toho Gas left its full-year forecast unchanged: sales of ¥670bn (up 2.9%), operating profit of ¥19bn (down 40.2%), and net profit of ¥23bn (down 26.9%), built on assumed crude at $100 a barrel and a ¥160/dollar exchange rate. Comprehensive income, which captures securities holdings, told a different story: it rose to ¥29.1bn, up 153.6%, largely on higher valuations of the company's investment portfolio. Core operating profit and portfolio gains, in other words, are moving on separate clocks this year.
On capital returns, Toho Gas bought back 5.91 million shares for ¥7.44bn during the quarter, following a 4-for-1 stock split effective April 1. It also issued two unsecured straight bonds totaling ¥20bn on July 16, a five-year tranche at 2.321% and a ten-year tranche at 3.198%, both earmarked to redeem outstanding commercial paper. The next test for the fuel-cost math comes as crude and the yen move through the rest of the fiscal year against those $100-a-barrel, ¥160-to-the-dollar assumptions.