Tokyo Gas : Financial Results for FY2020 ended March 2021

April 28, 2021

Consolidated Financial Results Bulletin for the Fiscal Year Ended March 31, 2021 (J-GAAP)

Tokyo Gas Co., Ltd.

Securities code: 9531

(URL https://www.tokyo-gas.co.jp/IR/english/index.html)

Representative:	Mr. UCHIDA Takashi, President
Contact:	Mr. KOMORI Rikiya, Chief Manager,
	Consolidated Settlements Sect.

General shareholders' meeting schedule: Scheduled date of the filing of securities report: Scheduled date of the start of dividend payments: Preparation of earnings presentation material (yes/no): Holding of earnings announcement (yes/no):

Stock listings:

Tokyo Stock Exchange, Nagoya Stock Exchange

Location of head office: Tokyo

June 29, 2021

June 29, 2021

June 30, 2021

Yes

Yes (for institutional investors)

(Amounts are rounded down to the nearest million yen)

1. Consolidated Performance for FY2020 ended March 31, 2021 (from April 1, 2020 to March 31, 2021)

								(Unit: million yen)
(1) Consolidated Business Performance		(% of change from the corresponding period of previous year)
		Net sales		Operating profit	Ordinary profit	Profit attributable to
			owners of parent
	FY2020 ended	1,765,146	-8.3%	77,675	-23.4%	70,500	-31.3%	49,505	14.3%
	Mar. 31, 2021
	FY2019 ended	1,925,235	-1.9%	101,418	8.2%	102,645	14.8%	43,293	-48.8%
	Mar. 31, 2020

Note: Total comprehensive income

FY2020 ended March 31, 2021: 34,259 million yen (-14.7%)

FY2019 ended March 31, 2020: 40,161 million yen (-41.0%)

		Diluted profit	Ratio of profit to	Ratio of	Ratio of
	Profit per share	ordinary profit to	operating profit to
	per share	shareholders' equity
		total assets	net sales
FY2020 ended	112.26 yen	-	4.3%	2.7%	4.4%
Mar. 31, 2021
FY2019 ended	97.86 yen	-	3.8%	4.1%	5.3%
Mar. 31, 2020

Reference: Profit or loss on investment accounted for by equity method

FY2020 ended March 31, 2021: 1,482 million yenFY2019 ended March 31, 2020: 5,211 million yen

Note: As provisional accounting treatments on business combinations were confirmed in the FY2020 ended March 31, 2021, the figures for FY2019 ended March 31, 2020 reflect the confirmed details of the provisional accounting treatments.

(2) Consolidated Financial Position

(Unit: million yen)

	Total assets	Total net assets	Equity ratio	Net assets per share
As of Mar. 31, 2021	2,738,348	1,178,271	42.1%	2,616.37	yen
As of Mar. 31, 2020	2,539,919	1,159,138	45.2%	2,602.53	yen

Reference: Shareholders' equity

As of March 31, 2021: 1,153,813 million yenAs of March 31, 2020: 1,147,747 million yen

Note: As provisional accounting treatments on business combinations were confirmed in the FY2020 ended March 31, 2021, the figures for FY2019 ended March 31, 2020 reflect the confirmed details of the provisional accounting treatments.

(3) Consolidated Cash Flows

				(Unit: million yen)
	Cash flows from	Cash flows from	Cash flows from	Cash and cash equivalents
	operating activities	investing activities	financing activities	at end of period
FY2020 ended	255,574	-295,911	52,009	157,811
Mar. 31, 2021
FY2019 ended	306,296	-270,798	23,171	151,218
Mar. 31, 2020

Note: As provisional accounting treatments on business combinations were confirmed in the FY2020 ended March 31, 2021, the figures for FY2019 ended March 31, 2020 reflect the confirmed details of the provisional accounting treatments.

2. Dividend

		Dividend per share (Unit: yen)			Total dividend			Dividend
							payments	Payout ratio
	End of	End of	End of	End of				on equity
	Full-year		(Full-year)	(Consolidated)
			(Consolidated)
	1Q	2Q	3Q	4Q
		(Unit: million yen)
FY2019 ended	-	30.00	-	30.00	60.00	26,460	61.3%	2.3%
Mar. 31, 2020
FY2020 ended	-	30.00	-	30.00	60.00	26,460	53.4%	2.3%
Mar. 31, 2021
FY2021 ending	-	30.00	-	30.00	60.00			-
Mar. 31, 2022 (Forecast)

3. Consolidated Results Forecast for FY2021 ending March 31, 2022 (April 1, 2021 - March 31, 2022)

(Unit: million yen)

(% of change

from the corresponding

period of previous year)

Net sales

Operating profit

Ordinary profit

Profit attributable to

Profit per

owners of parent

share

Full-year

1,816,000

2.9%

87,000

12.0%

72,000

2.1%

52,000

5.0%

117.91 yen

*Notes

1. Significant changes in consolidated subsidiaries (changes in specified subsidiaries resulting in change of scope of consolidation during the year) (yes/no): Yes

Newly included: 6 (Names) TG Natural Resources LLC, TGNR HoldCo LLC, TGNR RBLCo LLC, TGNR East Texas LLC, TGNR TVL LLC, Tokyo Gas United Kingdom Ltd.

Reference: Scope of consolidation and application of equity method

Number of consolidated subsidiaries: 107 (Increased by 26 companies and decreased by 1 company)

Number of subsidiaries and affiliates accounted for by equity method: 15 (Increased by 2 companies and decreased by 2 companies)

1. Change in accounting policies or estimates and retrospective restatements
2. 1. Change in accounting policies in accordance with revision of accounting standards: No
   2. Change in accounting policies other than item 1) above: No
   3. Change in accounting estimates: No
   4. Retrospective restatements: No
3. Number of issued shares (common stock)

					(Unit: share)
1)	Number of issued shares at end of	Mar. 31, 2021	442,436,059	Mar. 31, 2020	442,436,059
	period (including treasury stock):
2)	Number of shares of treasury stock	Mar. 31, 2021	1,437,924	Mar. 31, 2020	1,424,746
	at end of period:
3)	Average number of shares during	Apr. 2020- Mar. 2021	441,005,584	Apr. 2019- Mar. 2020	442,379,702
	period:

(Reference)

1. Non-Consolidated Business Results for FY2020 ended March 31, 2021 (April 1, 2020 - March 31, 2021)

(1) Non-Consolidated Business Performance

(Unit: million yen) (% of change from the corresponding period of previous year)

			Net sales	Operating profit	Ordinary profit	Net income
	FY2020 ended		1,612,911	-9.8%	47,069	-24.1%	46,764	-31.6%	42,516	-25.0%
	Mar. 31, 2021
	FY2019 ended		1,787,975	1.1%	62,044	26.8%	68,342	8.6%	56,703	5.6%
	Mar. 31, 2020
			Profit per share	Diluted profit
			per share
	FY2020 ended			96.41 yen		-
	Mar. 31, 2021
	FY2019 ended			128.18 yen		-
	Mar. 31, 2020
(2) Non-Consolidated Financial Position
									(Unit: million yen)
			Total assets	Total net assets	Equity ratio	Net assets per share
	As of Mar. 31, 2021			2,110,568		805,000		38.1%	1,825.41 yen
	As of Mar. 31, 2020			2,094,493		818,433		39.1%	1,855.81 yen
Reference: Shareholders' equity
	As of March. 31, 2021: 805,000 million yen		As of March 31, 2020: 818,433 million yen

2. Non-Consolidated Results Forecast for FY2021 ending March 31, 2022 (April 1, 2021 - March 31, 2022)

(Unit: million yen) (% of change from the corresponding period of previous year)

	Net sales		Operating profit	Ordinary profit	Net income	Profit per
		share
Full-year	1,600,000	-0.8%	46,000	-2.3%	40,000	-14.5%	30,000	-29.4%	68.03 yen

• Quarterly review procedures by a certified public accountant or an audit firm do not apply to quarterly consolidated financial results bulletins.
• Explanation related to appropriate use of results forecasts and other items warranting special mention

1. As the COVID-19 pandemic has not yet abated, consolidated and non-consolidated results forecasts include numerous elements of uncertainty. Therefore, the forecasts are subject to drastic changes depending on future developments. For details of the above forecasts, please refer to "1. Overview of Business Performance, etc. (2) Future outlook" on page 6 of the Attachment.
2. The information related to this Financial Results will be posted on the Web site of the Company.

Contents of Attachment

I. Overview of Business Performance, etc. ...................................................................................................................	2
(1)		Overview of business performance and financial position of FY2020....................................................................	2
(2)		Future outlook .............................................................................................................................................................	6
II.	Group Companies .......................................................................................................................................................	7
III. Basic Concept Regarding Selection of Accounting Standards ................................................................................	7
IV. Consolidated Financial Statements and Main Notes................................................................................................	8
(1)		Consolidated balance sheets .......................................................................................................................................	8
(2)		Consolidated statements of income and comprehensive income ...........................................................................	10
		(Consolidated statement of income).........................................................................................................................	10
		(Consolidated statement of comprehensive income) ..............................................................................................	11
(3)		Consolidated statements of changes in net assets ...................................................................................................	12
(4)		Consolidated statements of cash flows ...................................................................................................................	16
(5)		Notes on consolidated financial statements .............................................................................................................	18
	1)	(Note on going concerns' premise) ...........................................................................................................................	18
	2)	(Additional information)...........................................................................................................................................	18
	3)	(Segment information, etc.) ......................................................................................................................................	18
	4)	(Per share information).............................................................................................................................................	21
	5)	(Material subsequent events)....................................................................................................................................	22
V.	Non-Consolidated Financial Statements .................................................................................................................	24
(1)		Balance sheets ............................................................................................................................................................	24
(2)		Statements of income.................................................................................................................................................	26

1

1. Overview of Business Performance, etc.

1. Overview of business performance and financial position of FY2020 (Business performance of FY2020)
   During the fiscal year under review, the Japanese economy remained plagued by a decline in companies' capital expenditure and consumer spending as well as a worsening employment environment caused by a decrease in corporate earnings on the back of stagnant economic activities following the outbreak of the novel coronavirus (COVID-19). While there are signs of a mild recovery, the outlook of the economy remains unclear, with new waves of the spread of COVID-19 infections occurring intermittently.
   Amid this economic climate, competition between energy operators in the energy industry as well as competition across industry borders have intensified due to the full deregulation of retail gas sales in April 2017 that followed the full deregulation of retail electric power sales in April 2016. The environment surrounding the energy business experienced major changes, including decarbonization becoming a global trend. Against this backdrop, we actively undertook various measures to enhance the added value we deliver to customers in Japan and abroad through the development of a comprehensive energy business and globalization.
   The outbreak of COVID-19 has affected the Company in many ways. In the city gas business, although there was a rise in residential demand as customers spent more time at home, there was a decline in commercial demand in the restaurant and hotel sectors as well as a decline in industrial demand for some of the power generation customers due to a decrease in operation. In the electric power business, the outbreak boosted retail demand as customers spent more time at home, while it pushed down wholesale demand. In the overseas business, there was a deterioration in earnings due in part to a drop of selling prices in the LNG business, etc. in Australia and North America on the back of a global decline of market prices. In the energy-related business, the COVID-19 outbreak caused a decline in sales volume of core gas equipment products such as TES and the Ene-Farm home fuel cell system and a decrease in installation work due to a drop in the number of new installations. In the real estate business, the room occupancy rates of the hotel business saw a significant decline.
   In light of these economic conditions and changes in the business climate, consolidated net sales for the year under review totaled ¥1,765.1 billion, a drop of 8.3% year on year and operating expenses came to ¥1,687.4 billion, a decline of 7.5% year on year.
   Extrapolating from this performance, operating profit was ¥77.6 billion, a decrease of 23.4% year on year, and ordinary profit totaled ¥70.5 billion, a drop of 31.3%. Profit attributable to owners of the parent came to ¥49.5 billion, a growth of 14.3% year on year. This reflected the posting of a ¥5.2 billion gain on sales of investment securities, a ¥3.1 billion gain on sales of non-current assets and a ¥2.0 billion gain on bargain purchase as extraordinary income, a ¥10.2 billion impairment loss on the overseas upstream business, etc. and a ¥4.4 billion loss on valuation of investment securities as extraordinary losses, and income taxes.

1) Gas

The sales volume of the city gas business, which is the main business of the gas segment, was 12,990 million m3 in the fiscal year under review, a decrease of 6.2% year on year. Breaking this down, residential demand was 3,207 million m3, an increase of 2.7%, primarily due to a rise in demand as customers spent more time at home, despite a drop in the number of customers.

Commercial demand was 2,261 million m3, a decline of 9.4%, as customers in sectors such as restaurants and hotels shortened business hours or voluntarily suspended business due to the COVID-19 outbreak.

Industrial demand was 5,787 million m3, a decline of 9.5%, mainly due to a decrease in sales volume to users dedicated to power generation.

Supply to other utilities was 1,735 million m3, a fall of 5.6%, primarily due to a drop in customer demand.

Gas sales came to ¥1,146.7 billion, a decrease of ¥208.7 billion or 15.4% year on year, owing mainly to a decline in city gas sales volume as well as a drop in gas unit price reflecting resource cost adjustments.

As a result of a drop in gas sales volume and a decrease in city gas resource costs due to a declining trend in crude oil prices compared to the previous fiscal year, the overall operating expenses decreased ¥194.6 billion or 15.5%. Consequently, segment profit totaled ¥88.4 billion, a decrease of ¥14.0 billion or 13.6% year on year.

2