Risk of Rising Electricity and Fuel Costs and Price Pass-Through
First written in FY2016. 13 of 26 entries say "Worsened", first in FY2017. Latest entry: FY2026.
Air Water moved to the "Worse" side of this theme in 2017, 4 years before the typical company in this theme (2021).
The whole theme swung hardest in 2022: 123 of 167 companies on the "Worse" side.
55 other companies' latest entry also says "Worsened".
- FY2026WorsenedAnnual report
「With electricity and logistics costs expected to rise as crude oil prices increase due to developments in the Middle East, we are working on price management that reflects the impact of these higher costs.」
The Company explicitly indicated that electricity and logistics costs were expected to rise as a result of soaring crude oil prices, thereby specifying the areas subject to cost inflation risk. It also noted that price management was being used to address the issue. - FY2025MitigatedAnnual report
「Operating profit was affected by the functional materials business and helium procurement costs, but remained firm as digital and semiconductor-related businesses performed well, while the effects of industrial gas price management and higher productivity in plant operations also contributed.」
The company explains that while it incurred costs such as helium procurement expenses, the effect of price management in industrial gases and improved plant operating productivity contributed to operating profit. - FY2025-H1MitigatedAnnual report
「Although performance during the period was affected by stagnant semiconductor market conditions in some businesses, price revisions for various industrial gases implemented to date and initiatives in the overseas industrial gas business and the agri-business progressed smoothly, resulting in higher profit in all segments.」
The Company explained that the smooth implementation of price revisions for various industrial gases and its response to rising costs and the risk of passing them through to prices contributed to higher earnings. - FY2024-Q3MitigatedAnnual report
「In addition to the benefits of cost reductions, including more efficient production and logistics, and price revisions in industrial gases and commercial salt, where costs had risen from the previous fiscal year, the Global & Engineering business continued to expand by winning new projects for liquefied hydrogen tanks, for which demand is strong, and large data centers.」
The Company explained that cost reductions and price revisions in industrial gases and industrial salt had taken effect, partially reducing the impact of risks from rising costs and the passing through of higher costs to prices. - FY2024-Q1MitigatedAnnual report
「During the first quarter of the current fiscal year, measures to address rising costs, including price adjustments implemented since the previous fiscal year for various products such as industrial gases and industrial salt, progressed smoothly.」
In response to higher costs for electricity, raw materials and other items, price adjustments progressed steadily for industrial gases and commercial-use salt, partially mitigating the impact of price pass-through and cost measures. - FY2023WorsenedAnnual report
「However, in the power business using the FIT system, the company was unable to pass on increases in power generation fuel and marine transportation costs to prices and was therefore significantly affected throughout the fiscal year.」
Higher fuel and ocean transport costs, together with the difficulty of passing these costs on to customers, put continued pressure on full-year profits in the FIT power business. - FY2023-Q3WorsenedAnnual report
「Meanwhile, in the electricity business, procurement costs, including ocean transportation, rose sharply in addition to the prices of woody biomass and coal used as power-generation fuels.」
Higher energy, raw material and ocean transport costs have materialised as a sharp increase in procurement costs in the power business, and the resulting burden, which cannot be fully offset by price adjustments alone, has continued. - FY2023-Q2WorsenedAnnual report
「During the cumulative consolidated second quarter, amid continued cost increases for energy and various raw materials, the company worked to reduce costs across its businesses, including by improving production and logistics efficiency, while implementing thorough price adjustments. As a result, revenue increased in every business segment, driven in part by higher selling prices. However, in the power business of Energy Solutions, the prices of wood biomass and coal used as generation fuels, as well as procurement-related costs including marine transportation, rose sharply.」
Energy, raw material and ocean transportation costs continued to rise, and revenue increased as prices were adjusted, while the power business continued to face sharply higher procurement costs, according to the company. - FY2023-Q1WorsenedAnnual report
「The company pursued thorough price revisions to address higher industrial gas production costs resulting from rising electricity charges, but some impact from the timing of their implementation remained.」
Industrial gas production costs continue to rise due to higher electricity charges. Although price revisions are being implemented, the impact of timing differences in their application remains. - FY2022-Q3WorsenedAnnual report
「Revenue from the LPG business increased as selling prices rose in line with CP prices, the benchmark for import prices. Profit, however, fell below the year-earlier level as household LPG consumption declined due to a temporary lag in price revisions and the reaction to stay-at-home demand.」
Although LP gas selling prices increased, a temporary lag in household price revisions resulted in profit falling below the prior-year level. The burden associated with passing through higher costs has again appeared in actual results. - FY2022-Q2MitigatedAnnual report
「In the LP gas business, sales unit prices rose in line with CP prices, the benchmark for import prices. Kerosene prices also increased in response to higher crude oil prices, resulting in higher revenue.」
The company explains that selling prices also rose in response to higher import prices for LP gas and kerosene and higher crude oil prices, expanding revenue. This indicates a reduced impact from difficulties in passing through higher prices. - FY2022-Q1MitigatedAnnual report
「Improved productivity at the company's own logistics centers and increased transport of medical waste also contributed, offsetting the impact of higher diesel prices, and operations proceeded smoothly.」
The company states that it offset the cost burden from higher diesel prices through improved productivity at its own logistics centres and increased transportation of medical waste. - FY2021-Q3MitigatedAnnual report
「Although total cargo volumes handled by the transportation business declined, mainly in building materials, the impact was offset by more efficient deliveries through the newly established centralized dispatch center and lower costs resulting from the decline in diesel prices.」
In logistics, lower diesel prices and delivery efficiency gains from a centralized dispatch center contributed to cost improvements and mitigated the impact of higher fuel and logistics costs. - FY2020-Q2RestatedAnnual report
「The agricultural products and processing business continued to face a difficult operating environment, with raw material prices rising as well as logistics and labour costs increasing. The beverage business also reported results below the same period of the previous year, as contracted volumes declined because temperatures were low during the summer demand season, while logistics and labour costs increased.」
Higher raw material, logistics, and labor costs continue to pressure profits in the agriculture and food-related business. No new reduction in the risks surrounding the burden of higher costs and their pass-through to prices is described. - FY2020-Q1WorsenedAnnual report
「The agriculture and processing business struggled in the ham and deli and sweets fields due to higher logistics costs and intensified market competition, and the agricultural business, which cultivates, processes, and sells vegetables, was also affected by weak vegetable market prices. The beverage business fell below the same period of the previous year because temperatures remained lower than normal, limiting growth in contract production, while energy and labor costs increased.」
Higher logistics costs, energy costs and labor costs are emerging as actual factors squeezing profits in the agriculture and food-related businesses, and the burden of rising costs is spreading. - FY2019-Q3WorsenedAnnual report
「Industrial gas sales increased steadily overall, but profit was affected by higher electricity rates as well as increased logistics costs.」
The disclosure identifies higher logistics costs, in addition to rising electricity rates, as a tangible burden on profit, indicating that cost inflation risks remain. - FY2019-Q2RestatedAnnual report
「Industrial gas sales were generally steady, but profitability was affected by higher manufacturing costs for industrial gases resulting from rising electricity rates.」
Higher electricity charges continue to increase the cost of producing industrial gases. While the company is responding through sales volume growth and appropriate price adjustments, the burden of higher costs remains. - FY2019-Q1WorsenedAnnual report
「Profit conditions were challenging due to higher costs for sales promotion and the launch of new businesses, as well as the decline in kerosene sales volumes caused by the growing consumer tendency to economise in response to higher prices.」
In the energy-related business, higher costs and consumers' preference for saving in response to price increases emerged as factors worsening profitability. Pressure from rising costs and price pass-through continues. - FY2018WorsenedAnnual report
「The industrial gases-related business remained broadly at the previous year's level. Regional gas operations, centred on tanker and cylinder supply, performed well against a backdrop of continued firm gas demand across a broad range of domestic manufacturing industries. However, results were affected by higher electricity charges and fluctuations in operations caused by equipment problems at a customer's plant in the on-site gas supply business for blast furnaces.」
Higher electricity rates emerged as increased manufacturing costs for industrial gases in full-year results, and the risk of continued cost increases remains. - FY2018-Q3RestatedAnnual report
「In addition, higher electricity charges increased the production costs of industrial gases.」
The increase in industrial gas production costs resulting from higher electricity charges continues to be reflected in results. - FY2018-Q2WorsenedAnnual report
「In addition, higher electricity charges increased the production costs of industrial gases.」
Higher electricity charges have materialized as increased industrial gas production costs, and the risk of rising costs continues to worsen. - FY2018-Q1WorsenedAnnual report
「Although freight volumes increased in the transport business, results were affected by higher costs, including vehicle renewal investments, rising diesel prices and higher costs at partner companies. The business also strengthened its management structure by introducing systems to respond to changes in the operating environment.」
The impact of higher fuel costs extended beyond industrial gas operations to the logistics business, with higher costs attributed to rising diesel prices and increased fees charged by subcontractors. - FY2017WorsenedAnnual report
「Manufacturing costs for industrial gases benefited from lower fuel-cost adjustment charges in electricity rates, but reversed course and began rising in the second half of the fiscal year. The company is working to rationalize logistics costs and adjust gas prices appropriately.」
The tailwind from lower electricity prices reversed in the second half of the fiscal year, resulting in higher manufacturing costs. The company is responding by rationalizing logistics costs and bringing prices into line with costs. - FY2017-Q2RestatedAnnual report
「Although electricity rates, which have a significant impact on industrial gas manufacturing costs, have improved through fuel-cost adjustments, regional differences and other issues remain. The Company will therefore continue working to adjust industrial gas prices appropriately.」
While an improvement in electricity charges from fuel-cost adjustments was reported, regional disparities and challenges related to appropriate pricing continue. - FY2017-Q1MitigatedAnnual report
「Although electricity rates, which have a significant impact on industrial gas production costs, have improved following reductions in fuel-cost adjustment rates, regional differences and other issues remain. We will therefore continue working to bring industrial gas selling prices to appropriate levels.」
The reduction in the fuel-cost adjustment unit rate partially reduced the cost risk associated with electricity charges, but regional differences and the need to optimize sales prices remain challenges. - FY2016First statedAnnual report
「If electricity costs rise due to a surge in crude oil prices or other factors, the manufacturing costs of industrial gases such as oxygen and nitrogen produced and sold by the Group will increase. If the company is unable to pass these additional costs on to customers, they may affect the profitability of the industrial gas business.」
The company identifies higher industrial gas production costs, transport costs, and LPG and kerosene procurement prices, together with delays in passing these increases on to customers, as risks.