Iwatani Corporation (8088): FY2025 Results Summary — Net Sales Grow While LPG Price Swings Weigh on Operating Profit

This article is based on publicly available IR materials and is not a recommendation to buy or sell any specific securities.

Iwatani Corporation reported net sales of 908.5 billion yen for FY2025 (the fiscal year ended March 31, 2026), up 25.5 billion yen or 2.9% year on year, driven by strong sales of products for the industrial field, mainly in the Materials business and the Industrial Gases & Machinery business. Operating profit fell 7.9 billion yen (17.1%) to 38.3 billion yen and ordinary profit fell 6.2 billion yen (10.2%) to 55.2 billion yen, reflecting lower profitability in helium and the negative impact of LPG import price fluctuations. Profit attributable to owners of parent rose 7.2 billion yen (17.8%) to 47.6 billion yen, partly due to a gain on the sale of fixed assets. For FY2026 (ending March 31, 2027) the company forecasts net sales of 9,600 and operating profit of 488 (100 million yen), with an annual dividend of 47.00 yen.

Consolidated Results (Full-Year Actual)

Net sales rose while operating profit and ordinary profit declined; profit attributable to owners of parent increased. Operating profit excluding the impact of LPG import price fluctuation was 44.0 billion yen, down 4.3% year on year, against the reported 17.1% decline. Equity gains of affiliated companies related to Cosmo Energy HD increased 20.2% to 10.9 billion yen. The company notes that, due to the finalization of the provisional accounting treatment for the business combination with ISG, Inc., operating profit, ordinary profit, and profit attributable to owners of parent for FY2024 have been revised from the amounts previously announced, and all data in the presentation reflect that revision.

Item (100 million yen)	FY25 Results (A)	FY24 Results (B)	YoY (A)-(B)	YoY (A)/(B)	FY25 Forecasts*
Net sales	9,085	8,830	+255	+2.9%	8,880
Gross profit	2,358	2,343	+15	+0.7%	–
Operating profit	383	462	(79)	(17.1)%	358
Operating profit excluding impact of LPG import price fluctuation	440	460	(19)	(4.3)%	417
Non-operating profit	169	152	+16	+10.8%	–
Equity gains of affiliated companies related to Cosmo Energy HD	109	91	+18	+20.2%	79
Ordinary profit	552	614	(62)	(10.2)%	482
Profit attributable to owners of parent	476	404	+72	+17.8%	405

*FY25 Forecasts were announced on February 10, 2026. On the balance sheet, total assets increased +267 to 8,997 (100 million yen), as property, plant and equipment and investment securities grew, while current liabilities decreased (438) on lower commercial paper. Interest-bearing debt stood at 247.3 billion yen, down 17.0 billion yen, with a ratio of interest-bearing debt to total assets of 27.5% and a capital ratio of 48.6%. Cash flows from operating activities provided 59.1 billion yen and investing activities used 23.7 billion yen due to expansion of LPG centers and industrial gas production plants in Japan and overseas, so free cash flow was an inflow of 35.3 billion yen.

Segment Results

By segment, Integrated Energy saw both net sales and operating profit decline, Industrial Gases & Machinery grew sales but saw profit fall, and Materials grew sales with operating profit broadly flat.

Segment (100 million yen)	Metric	FY25 Results (A)	FY24 Results (B)	YoY (A)-(B)	YoY (A)/(B)
Consolidated	Net sales	9,085	8,830	+255	+2.9%
Integrated Energy	Net sales	3,677	3,787	(110)	(2.9)%
Industrial Gases & Machinery	Net sales	2,887	2,714	+172	+6.4%
Materials	Net sales	2,183	2,016	+166	+8.3%
Others	Net sales	336	310	+25	+8.3%
Consolidated	Operating profit	383	462	(79)	(17.1)%
Integrated Energy	Operating profit	134	195	(60)	(30.8)%
Industrial Gases & Machinery	Operating profit	154	175	(21)	(12.3)%
Materials	Operating profit	116	117	(1)	(1.1)%
Others, Adjustments	Operating profit	(22)	(26)	+4	–

In Integrated Energy (net sales 367,732 million yen, operating profit 13,498 million yen), the presentation attributes the change in operating profit mainly to the impact of LPG import price fluctuation of (5,930) million yen, retail of +1,330 million yen on higher LPG sales volume and profitability, wholesale of (810) million yen on lower LPG sales volume, industrial of +10 million yen on new customer acquisition, energy-related equipment of +310 million yen on solid sales of LPG-powered emergency generators and house equipment, and portable gas cooking stoves and cassette gas canisters of (940) million yen on lower sales in Japan and China. Excluding the LPG import price impact, segment operating profit was 19,207 million yen, down just 0.5%.

In Industrial Gases & Machinery (net sales 288,730 million yen, operating profit 15,414 million yen), the main factors were air separation gases of +80 million yen on solid sales mainly for the electronic component and optical fiber industries, the hydrogen business of +4,050 million yen on higher sales of hydrogen and hydrogen-related equipment, specialty gases of (5,750) million yen on declining profitability due to weakening helium markets, and gas-related equipment of (540) million yen on lower sales of equipment for the automotive industries. In Materials (net sales 218,377 million yen, operating profit 11,613 million yen), functional plastics products contributed +290 million yen on solid sales of resin products for food packaging and higher volumes of eco-friendly PET resins, resources and advanced materials (360) million yen, metals +50 million yen on higher stainless steel sales including the impact of new consolidation, and electronic materials (110) million yen on sluggish sales of high-performance film materials.

FY2026 Forecast

For the year ending March 31, 2027, Iwatani forecasts net sales of 9,600 (100 million yen), up 5.7%, and operating profit of 488, up 27.4%, with ordinary profit of 590, up 6.8%. Profit attributable to owners of parent is forecast at 455, down 4.5% from FY2025. The forecast assumes an exchange rate of 150 JPY/$ and an LPG import price of 550 $/t, compared with FY2025 results of 151.14 JPY/$ and 549 $/t. Because two consolidated subsidiaries are reclassified from “Others” to the Integrated Energy business starting from FY2026, the FY2025 comparatives in this table have been restated.

Item (100 million yen)	FY26 Forecasts	FY25 Results (restated)	Change	Rate
Net sales	9,600	9,085	+514	+5.7%
Integrated Energy	4,047	3,964	+82	+2.1%
Industrial Gases & Machinery	2,927	2,887	+39	+1.4%
Materials	2,573	2,183	+389	+17.8%
Others	53	49	+3	+7.4%
Operating profit	488	383	+104	+27.4%
Integrated Energy	231	150	+80	+53.2%
Industrial Gases & Machinery	185	154	+30	+20.0%
Materials	130	116	+13	+11.9%
Others, Adjustments	(58)	(37)	(20)	–
Operating profit excluding impact of LPG import price fluctuation	488	440	+47	+10.8%
Equity earnings of affiliated companies related to Cosmo Energy HD	88	109	(21)	(19.6)%
Ordinary profit	590	552	+37	+6.8%
Profit attributable to owners of parent	455	476	(21)	(4.5)%

Measures for the forecast include expanding the residential LPG business by increasing the number of LPG direct sales customers mainly through M&A, increasing sales of industrial LPG through fuel conversion, capturing new demand for liquid hydrogen, appropriate price adjustment in air separation and specialty gases, expanding eco-friendly PET resins and biomass fuels, and strengthening the resource business. Segment forecasts are 404,700 million yen in net sales and 23,100 million yen in operating profit for Integrated Energy, 292,700 million yen and 18,500 million yen for Industrial Gases & Machinery, and 257,300 million yen and 13,000 million yen for Materials.

Shareholder Returns

Iwatani’s return policy to shareholders is a progressive dividend plus a payout ratio of 20% or higher in the fiscal year ending March 31, 2028. The annual dividend for the fiscal year ending March 31, 2027 is planned to be 47.00 yen, comprising an interim dividend of 23.50 yen and a year-end dividend of 23.50 yen, the same annual amount as FY2025. Per-share amounts reflect a 4-for-1 share split of common shares with a reference date of September 30, 2024 and an effective date of October 1, 2024.

Item (yen)	FY24	FY25	FY26 (Forecast)
Interim dividend	–	23.50	23.50
Year-end dividend	–	23.50	23.50
Annual dividend per share	47.00	47.00	47.00
Dividend payout ratio	26.7%	22.7%	23.8%

Medium-Term Management Plan “PLAN27”

Under the medium-term management plan PLAN27, the FY2027 targets are operating profit of 650 (100 million yen), ROE of over 10% and ROIC of over 6%. For FY2025, ROE improved by 0.7 points to 11.6%, maintaining a level above the shareholders’ equity cost of 8.0%, while ROIC decreased by 1.1 points to 4.0%, a level below the WACC of 5.5%. Operating profit for FY2025 was 38.3 billion yen, and operating profit excluding the impact of LPG import price fluctuation was 44.0 billion yen.

On capital policy, FY2025 investment totaled 57.3 billion yen against a PLAN27 five-year total of 470.0 billion yen, with 6.9 billion yen for hydrogen strategies, 0.8 billion yen for carbon-free strategies, 3.6 billion yen for domestic energy and service strategies, 8.7 billion yen for overseas strategies, 31.1 billion yen for foundational businesses and 5.9 billion yen for maintenance and repairs. Net income of 47.6 billion yen and depreciation of 35.4 billion yen funded investment of 57.3 billion yen, dividends of 16.2 billion yen and a 17.0 billion yen reduction in interest-bearing debt. Net DER was 0.50 in FY2025 against a PLAN27 target of approximately 0.6.

Topics

On the situation in the Middle East, Iwatani states that sourcing of LPG from the Middle East was suspended and that it ensures stable supply of LPG by leveraging diversified procurement sources, primarily the United States and Southeast Asia, together with private-sector stockpiling under the legally required 40-day reserve. For helium, sourcing from Qatar was suspended, and the company maintained stable supply primarily to existing customers by procuring from the United States and utilizing domestic and overseas storage capabilities.

In hydrogen, the company obtained certification for price gap support under the Hydrogen Society Promotion Act for an on-site low-carbon hydrogen supply project at Aichi Steel Corporation, aiming to produce and supply approximately 1,600 tons of hydrogen annually, and it is considering a liquid hydrogen plant at the Chiba Refinery of Cosmo Oil Co., Ltd. with planned start of operation in FY2029. It operates two hydrogen refueling stations for commercial vehicles in Tokyo, at Heiwajima and the Ariake bus depot, with an additional station at Shinsuna scheduled to open around 2027. In the domestic energy business, the number of LPG direct sales customers reached 1,210,000 in FY2025, an increase of 110 thousand households over the past three years. Overseas, Iwatani acquired Coburn Resources Pty Ltd in Australia to secure new mineral sands mining sites, invested in Nordic Mining ASA in Norway for high-purity titanium ore with sales in the Japanese market scheduled to start in FY2026, acquired 100% of the shares of Bangkok Sanyo Spring Co., Ltd., and is building a rare earths refining plant with Caremag SAS in France, planning to begin production in 2027.

This article is an analysis based on publicly available information and is not a recommendation to buy or sell any specific securities. Investment decisions are your own responsibility.