Evolution into comprehensive energy service companies driven by electricity and city gas market liberalization

「Amid growing demand for low-carbon and decarbonisation solutions, the company actively promoted customers' conversion from heavy fuel oil to LNG and began supplying energy that contributes to carbon neutrality by using underutilised local resources, including liquefied biomethane derived from livestock manure.」

「Amid growing demand for low-carbon and decarbonized solutions, we actively promoted customers' fuel conversion from heavy oil to LNG and began supplying energy that contributes to carbon neutrality by utilizing underused local resources, including liquefied biomethane derived from livestock manure. In addition, for household LP gas supply centered on Hokkaido, we worked to strengthen earning power by improving delivery efficiency through IoT technology and acquiring customer accounts from distributors to gain customers.」

「In the energy business, the company reorganized its operations in Hokkaido, its main business area, centered on integrating its wholesale and retail functions, with the aim of strengthening earnings power.」

「Against this backdrop, the company will seek to improve the direct-sales ratio through acquisitions of retailers' customer bases and proactive customer-acquisition initiatives, thereby strengthening profitability. It will also introduce LPWA (Low Power Wide Area), which enables long-distance data communications with low power consumption, to monitor remaining volumes of LP gas and kerosene, and will improve the efficiency of delivery, filling and meter-reading operations.」

「In the energy business, the energy segment centred on LP gas supply recorded higher revenue as selling prices rose in line with import prices, despite a decline in household sales volumes due to lower stay-at-home demand. In terms of profit, the reorganisation in April of the household energy supply business in Hokkaido enabled the Company to improve delivery efficiency, including through the introduction of LPWA (low-power wide-area communications), and the business remained solid.」

「A review of business processes, including improving LPG delivery efficiency through the use of IoT, also contributed to improved profitability.」

「The domestic LP gas business faces the challenges of declining LPG consumption per unit and a shortage of delivery personnel. By introducing automated meter-reading systems using IoT and other measures, the Company will provide services that give customers greater peace of mind.」

「Pacific Petoroleum Import and Export Trading Joint Stock Company, a Vietnamese LP gas operator acquired through M&A in the previous consolidated fiscal year, was newly included in consolidation.」

「The LP gas business was affected on the revenue side by a decline in LP gas selling prices in line with import prices. Against this backdrop, the number of residential customers increased through measures including the acquisition of sales territories from distributors and efforts to encourage enrolment in a points-based service. In the industrial segment as well, sales expanded mainly in western Japan through measures including the additional deployment of company-operated tanker trucks.」

「However, in the consumer segment, the number of direct-sale customers increased through acquisitions of distributors' customer bases, while customer acquisition also advanced through services such as loyalty points. In the industrial segment, sales expansion in Honshu progressed through initiatives including increasing the number of tanker trucks operated by the company. As a result, sales volume increased steadily and profit remained firm.」

「The LP gas business was affected on the revenue side by a decline in LP gas selling prices in line with import prices. However, profits remained solid as the Company pursued measures to attract more residential customers, including a points-based service, and increased its direct-sale customer base through progress in acquiring sales territories from distributors. In the industrial segment, the Company worked to expand sales using its own tanker trucks, resulting in higher sales volumes.」

「The core LP gas business performed steadily as sales volumes increased through aggressive customer acquisition initiatives in the residential market and progress in acquiring distributors' customer bases. In the industrial market, the company also expanded sales by adding company-operated tanker trucks in western Japan.」

「In consumer LP gas, the number of customer households increased as the company pursued direct sales expansion, but sales volumes declined due to lower demand following the Hokkaido Eastern Iburi Earthquake and the record warm winter from October onward. In industrial LP gas, sales volumes increased and remained firm as the company worked with regional operating companies nationwide to promote fuel conversion from heavy oil to LP gas.」

「In addition to higher delivery costs, promotional expenses for the electricity retail business launched in October of this year were incurred ahead of the associated revenue, resulting in profit below the same period of the previous year.」

「Key initiatives to increase sales volume and customer numbers included expanding the number of customer locations and increasing the direct-sales ratio through the acquisition of sales rights. For households, in addition to WAON points, the Company launched a service offering L Den points through a new business partnership with Hokkaido Electric Power Company,Incorporated, supporting the acquisition of new customers. For industrial LP gas, the Company expanded its supply system by newly deploying company-operated LPG tanker trucks in priority areas of Honshu. It also worked with regional operating companies nationwide to promote the conversion of industrial-gas customers from heavy fuel oil to LP gas.」

「The acquisition of sales rights to increase the direct-sales ratio also progressed steadily. In the industrial-use business, the Company worked with regional operating companies nationwide to actively promote proposals to industrial gas customers for converting their fuel to LP gas or LNG, resulting in increased sales volume.」

「The company regards the liberalization of electricity and city gas resulting from a series of regulatory deregulation measures as an opportunity to transform its business structure and aims to evolve into a comprehensive energy services company chosen by consumers by expanding its range of products, services and energy offerings. As part of this effort, during the first quarter of the current consolidated fiscal year, the company entered into a business alliance with Hokkaido Electric Power Company,Incorporated concerning cooperation in the maintenance of LNG tank facilities being constructed by Hokkaido Electric Power Company,Incorporated in Ishikari, as well as the sale and transportation of LNG. It also launched a reciprocal points-award service combining the group's LP gas with Hokkaido Electric Power Company,Incorporated's electricity.」