In FY2026 Q3, assess whether gas volumes, which began declining in H1, recover on winter demand.

Gas operations are at the centre of 京葉瓦斯's production and sales activities, and the company has consistently explained the seasonality of sales, with a large proportion recorded during the winter months of January to March. The 9-month cumulative figures disclosed with the FY2026 Q3 results will therefore be an important point at which to assess the underlying performance of the gas business, including winter demand. Rather than looking only at the decline in H1, we will check how much cumulative volume including winter has recovered.

In FY2026 H1, residential gas volume was 192,907 thousand m³, down 2.9% year on year, while commercial volume was 176,847 thousand m³, down 2.3%. Total volume was 369,754 thousand m³, down 2.6%. Total volume in the year-earlier period was 379,636 thousand m³; volume that had increased 2.0% year on year in FY2025 H1 turned down in FY2026 H1. As both residential and commercial volumes declined, the movement may reflect multiple factors, including temperature, water temperature and customer-facility utilisation, rather than a temporary fluctuation in a single end-use category.

Previous disclosures have also indicated that mild winters and higher temperatures and water temperatures suppress residential demand, while the operation of industrial facilities and commercial heating and hot-water demand cause commercial volumes to fluctuate. Gas volume fell 6.7% year on year to 661 million m³ in FY2023, but increased 0.5% to 665,053 thousand m³ in FY2024, illustrating the sensitivity of volumes to weather conditions and the demand environment. In Q3, we need to determine whether the H1 decline narrows with winter demand and which of residential and commercial use leads the recovery.

The FY2026 H1 disclosure did not provide the specific year-on-year changes in temperature or water temperature, or the amount of impact from factors such as facility utilisation. At the next results, it will be important to assess not only 9-month cumulative volume, but also changes from the H1 levels of 192,907 thousand m³ for residential use and 176,847 thousand m³ for commercial use, year-on-year changes by end use, and the respective effects of weather and facility utilisation. If the decline in volume continues, we will track the impact on sales and segment profit as evidence of weak underlying demand excluding changes in selling prices.