Summary

**Iwatani Corporation** is an energy trading company established in 1930 that meets diverse customer needs through the supply of LP gas, liquefied natural gas (LNG), and city gas. Its operations are divided into three segments: the **Integrated Energy Business**, **Industrial Gas & Machinery Business**, and **Materials Business**, with a particular focus on the hydrogen energy business.

In fiscal year 2023, the company recorded revenue of approximately JPY 378.7 billion, representing a 6.1% increase year-on-year. LP gas sales volumes benefited from an expanded customer base through M&A strategies, while demand for household products also increased. The Industrial Gas & Machinery Business generated about JPY 271.4 billion in revenue and supplies liquefied hydrogen and air separation gases. The Materials Business recorded approximately JPY 201.6 billion in revenue and is actively developing environmentally friendly products.

As part of its efforts to realize a sustainable society, Iwatani aims to expand its hydrogen-related businesses, including the development of liquefied hydrogen supply infrastructure and the promotion of hydrogen fuel cells. For the fiscal year ending March 2025, revenue reached JPY 883.0 billion and net income attributable to owners of the parent was JPY 40.4 billion, representing a year-on-year decline in profit, although growth in LP gas supply and the liquefied hydrogen market contributed to performance.

Under its medium-term management plan **“PLAN27,”** the company aims to achieve operating profit of JPY 65.0 billion and a return on equity (ROE) of over 10%. The plan strengthens initiatives toward realizing a hydrogen energy society. Five key priority areas are outlined: the hydrogen strategy, decarbonization strategy, domestic energy and services strategy, overseas strategy, and non-financial strategy. These initiatives are intended to create synergy through mutual linkage.

For investors, it is important to evaluate how these initiatives will contribute to sustainable growth while closely monitoring the company’s growth strategy and market trends. As a key player in energy supply, Iwatani continues to build a stable foundation for growth while advancing innovation to contribute to a sustainable society.

1. Performance Overview for the Fiscal Year Ended March 2025 (Cumulative)

For the fiscal year ended March 2025 (April 2024–March 2025), consolidated revenue increased 4.1% year-on-year to JPY 883.0 billion. However, net income attributable to owners of the parent declined 6.9% to JPY 40.4 billion. Operating profit totaled JPY 46.2 billion and ordinary profit JPY 61.4 billion, both showing declines, mainly due to weakening helium market conditions in the Industrial Gas & Machinery Business.

Looking at performance trends over the past three years, the company achieved revenue of JPY 906.3 billion in fiscal year 2023. Although revenue temporarily declined to JPY 847.9 billion in fiscal year 2024, it returned to growth in fiscal year 2025. This growth was supported by expansion in LP gas supply and the liquefied hydrogen market, while demand for energy-related services and industrial products remained firm.

The competitive environment has become increasingly challenging. In particular, the LP gas business is susceptible to seasonal fluctuations, with sales tending to increase during the winter season. Going forward, hydrogen-related businesses are expected to function as a new growth engine.

Analysis of the income statement shows that the gross profit margin declined from 31.2% in the previous year to 26.5%, mainly due to the LP gas business and declining helium prices in the Chinese market. Selling, general, and administrative expenses also increased, resulting in an operating profit margin of 5.2%.

On the balance sheet, the current ratio remained healthy at approximately 1.08, while the equity ratio stood at 44.3%, indicating a stable capital structure. In the cash flow statement, operating cash flow increased significantly from JPY 13.1 billion in the previous year to JPY 51.5 billion. Investment cash flow was influenced by capital expenditures related to hydrogen energy projects.

Looking ahead, expansion of the Integrated Energy Business and growth in hydrogen-related operations are expected. In particular, providing products and services that support the transition to a decarbonized society will be an important theme. The company also plans to pursue M&A to acquire new customers and increase market share while advancing product development tailored to customer needs.

2. Outlook for the Fiscal Year Ending March 2025

The performance forecast for the fiscal year ending March 2025 is revenue of JPY 883.0 billion, operating profit of JPY 46.2 billion, ordinary profit of JPY 61.4 billion, and net income attributable to owners of the parent of JPY 40.4 billion.

Revenue is expected to increase by 4.1% year-on-year, while operating and ordinary profits are projected to decline. In particular, weakening helium market conditions in the Industrial Gas & Machinery Business have had a negative impact.

The LP gas business is highly sensitive to seasonal fluctuations, with sales typically increasing in winter, so a recovery in the second half of the fiscal year is anticipated. Additionally, the liquefied hydrogen market is expected to expand, and hydrogen-related businesses are anticipated to serve as a new growth driver.

Demand for energy-related services and industrial products also remains steady, providing support for overall performance. Although the competitive environment continues to intensify, Iwatani is exploring new business opportunities related to the transition to a decarbonized society based on its medium-term management plan “PLAN27.”

Key initiatives include expanding hydrogen energy businesses and increasing market share both domestically and internationally. For investors, it will be important to monitor how these growth strategies contribute to financial performance. Overall, Iwatani aims to achieve sustainable growth while responding flexibly to intensifying competition and changing market conditions.

3. Medium- to Long-Term Growth Strategy

Under its medium-term management plan **“PLAN27,”** Iwatani has formulated a growth strategy covering the five-year period from 2023 to 2027. The plan centers on the realization of a **hydrogen energy society**, with numerical targets of operating profit of JPY 65.0 billion, ROE of over 10%, and ROIC of over 6%.

Key initiatives include expanding hydrogen-related businesses, advancing decarbonization efforts, strengthening domestic energy services, expanding into overseas markets, and promoting non-financial strategies. These initiatives are designed to complement one another and generate synergy effects.

The hydrogen strategy focuses on constructing new liquefied hydrogen production plants and developing hydrogen refueling stations, strengthening competitiveness in the rapidly growing hydrogen market. The decarbonization strategy emphasizes developing environmentally friendly products and establishing a CO₂-free hydrogen supply chain, while also contributing to the **Sustainable Development Goals (SDGs)**.

In the domestic energy services strategy, the company aims to expand its market share through M&A and new services in response to the shrinking LP gas market, while also addressing challenges faced by local communities.

The overseas strategy targets growth in markets such as China and Southeast Asia, requiring flexible strategies tailored to regional characteristics. Meanwhile, the non-financial strategy focuses on promoting diversity and improving working conditions to enhance corporate brand value.

To support these initiatives, the company plans total investments of JPY 470.0 billion. Of this amount, JPY 178.0 billion will be allocated to the hydrogen strategy, JPY 270.0 billion to the Industrial Gas & Machinery Business, and JPY 70.0 billion to the Integrated Energy Business.

The “PLAN27” medium-term management plan serves as a critical roadmap for achieving sustainable growth. Investors will need to closely evaluate how these initiatives contribute to enhancing corporate value.

・ For the fiscal year ended March 2025, revenue increased 4.1% year-on-year to JPY 883.0 billion, while net income attributable to owners of the parent declined 6.9% to JPY 40.4 billion. Growth in hydrogen-related businesses is expected in the future.

・ The outlook for the fiscal year ending March 2025 projects revenue of JPY 883.0 billion (+4.1% year-on-year), while operating and ordinary profits are expected to decline due in part to weaker helium market conditions in the Industrial Gas & Machinery Business. However, expansion of the liquefied hydrogen market and strong demand for energy-related services are expected to support performance as the company explores new opportunities related to decarbonization under “PLAN27.”

・ Under the “PLAN27” medium-term management plan, Iwatani aims to realize a hydrogen energy society and achieve operating profit of JPY 65.0 billion, ROE of over 10%, and ROIC of over 6%, supported by planned investments totaling JPY 470.0 billion.

Business Overview

1. Overview of the Business Model

Iwatani Corporation is an energy trading company founded in 1930 that primarily supplies industrial and household gases and energy. In particular, through the provision of LP gas, liquefied natural gas (LNG), and city gas, the company responds to diverse customer needs and ensures a stable supply of energy. A major characteristic of Iwatani’s business model is its multiple business segments, which are closely interconnected and designed to generate synergy across operations.

One area of particular focus is the hydrogen energy business. As a field expected to grow significantly in the future energy market, the company is developing liquefied hydrogen supply infrastructure for fuel cell vehicles. This initiative not only responds to rising environmental awareness but also represents an important component of the company’s growth strategy. Reflecting its corporate philosophy—“Become a person needed by society; what society needs will prosper”—Iwatani aims to improve supply chain efficiency while flexibly responding to changing customer needs.

In addition, Iwatani promotes business development with equity-method affiliates to capture new markets and business opportunities. Its rapid product supply, supported by more than 300 locations across Japan, strengthens trust with customers and contributes to stable earnings. Through these initiatives, the company continues to establish itself not merely as a gas supplier but as an enterprise contributing to the realization of a sustainable society.

2. Major Business Segments

Iwatani’s operations are broadly divided into three primary segments: the **Integrated Energy Business**, the **Industrial Gas & Machinery Business**, and the **Materials Business**. Each segment operates with strategies tailored to its specific characteristics and market environment.

Integrated Energy Business
This segment focuses on the supply of LP gas, LNG, and city gas to households and businesses. In fiscal year 2023, revenue reached approximately JPY 378.7 billion, representing a 6.1% increase from the previous year. In particular, LP gas sales volumes grew as a result of an expanded customer base through M&A strategies, ensuring stable revenue through the provision of products for both household and commercial use.

Among household products, demand for cassette stoves and cassette gas cartridges has increased rapidly, with strong sales particularly in the outdoor market. The company has also strengthened its product lineup for disaster preparedness and introduced carbon-neutral products, contributing to the development of a sustainable business model.

Industrial Gas & Machinery Business
This segment recorded approximately JPY 271.4 billion in revenue in fiscal year 2023, representing growth of 3.5% compared with the previous year. The segment supplies liquefied hydrogen and air separation gases such as oxygen, nitrogen, and argon, enabling the company to meet demand across a wide range of industrial sectors.

Iwatani’s hydrogen business has drawn particular attention amid increasing expectations for a decarbonized society. Technological innovation in liquefied hydrogen supply is progressing, enabling the company to maintain competitiveness in areas such as hydrogen station development and hydrogen fuel cell operations.

Materials Business
The Materials Business recorded revenue of approximately JPY 201.6 billion in fiscal year 2023, representing growth of 1.7% year-on-year. In this segment, the company develops and supplies environmentally friendly products, including biomass fuels and recycled PET resin, which have gained strong market recognition.

Recently, the company has also been strengthening efforts in the development of secondary battery materials, aiming to establish a sustainable resource supply system.

Through these initiatives, the strengths of each business segment complement one another, enhancing the company’s overall competitiveness. The diverse services offered by Iwatani continue to build strong customer trust and reinforce its position in the market.

3. Market Position and Competitive Advantages

Iwatani has established a strong market position in the energy and industrial gas markets, with particularly notable leadership in the LP gas and liquefied hydrogen sectors. The company holds a high share in the domestic LP gas market, and its extensive supply network enables rapid service delivery, which contributes to strong customer trust.

Furthermore, Iwatani actively addresses environmental issues and decarbonization by focusing on the development of hydrogen-related businesses, thereby maintaining its competitive advantage. By developing liquefied hydrogen supply infrastructure and promoting the adoption of hydrogen fuel cells, the company is contributing to the realization of a sustainable society.

The company also seeks to create new business opportunities through collaboration with equity-method affiliates. Through these initiatives, Iwatani is recognized not merely as an energy supplier but as a company providing innovative solutions aimed at building a sustainable society. Such broad-based efforts are expected to serve as a key driver of future growth.

4. Market Background

The energy industry to which Iwatani belongs is undergoing rapid change due to increasing global awareness of environmental issues and government policies promoting decarbonization. As a result, the transition toward renewable energy is accelerating, and demand for hydrogen energy is rising. Over the long term, these changes are expected to contribute to the evolution of business models and create new market opportunities.

In particular, climate change mitigation policies being implemented across approximately 220 countries are increasing the demand for environmentally friendly products and services. In response to this trend, Iwatani is strengthening its supply of sustainable energy, with the development of hydrogen-related businesses likely to become a particularly important factor.

At the same time, risk management in response to external factors—such as fluctuations in crude oil prices and changes in international geopolitical conditions—remains essential. To respond flexibly to market changes, Iwatani is promoting digital transformation through the use of IT technologies in order to improve operational efficiency and reduce costs.

Adapting quickly to market changes and meeting customer needs will be crucial to enhancing corporate value going forward. To maintain its competitive advantage, the company must establish a sustainable energy supply system, develop new markets, and advance next-generation technologies. Through these initiatives, Iwatani is expected to achieve continued sustainable growth, making it important to closely monitor both its future performance and broader market trends.

Performance Trends

1. Recent Performance Overview

Iwatani Corporation recorded revenue of JPY 883.0 billion for the fiscal year ending March 2025, representing a 4.1% increase compared with the previous fiscal year. However, net income attributable to owners of the parent declined 6.9% year-on-year to JPY 40.4 billion. Operating profit and ordinary profit also decreased, reaching JPY 46.2 billion and JPY 61.4 billion respectively. This decline in profit was mainly due to weaker helium market conditions in the Industrial Gas & Machinery Business.

Looking at performance over the past three years, revenue reached JPY 906,261 million in fiscal year 2023. Although it temporarily declined to JPY 847,888 million in fiscal year 2024, revenue recovered to JPY 883.0 billion in fiscal year 2025. This recovery was supported by expansion in LP gas supply and the liquefied hydrogen market. In addition, steady demand for energy-related services and industrial products also contributed positively.

The competitive environment has become increasingly challenging, making it important to closely monitor performance trends in individual segments such as LP gas and industrial gases. For example, the LP gas business is particularly sensitive to seasonal fluctuations, with revenue typically increasing during winter. Furthermore, as the transition toward a decarbonized society progresses, hydrogen-related businesses are expected to serve as a new growth engine.

2. Analysis of the Income Statement

A detailed analysis of the income statement shows that revenue for fiscal year 2025 reached JPY 883.0 billion, while the cost of sales amounted to JPY 636.8 billion, resulting in a gross profit of JPY 234.3 billion. The gross profit margin stood at 26.5%, declining from 31.2% in the previous year. This decline was mainly attributable to the LP gas business and falling helium prices in the Chinese market.

Selling, general, and administrative expenses totaled JPY 144.0 billion, representing a 4.0% increase from the previous year. This increase was mainly due to rising labor costs and higher logistics expenses. As a result, operating profit amounted to JPY 46.2 billion, with an operating margin of 5.2%.

Ordinary profit decreased slightly from JPY 62,307 million in the previous year to JPY 61,487 million, although an increase in non-operating income partially offset the decline.

Regarding extraordinary items, gains on the sale of investment securities increased to JPY 8,466 million from JPY 3,162 million in the previous year. However, extraordinary losses also rose to JPY 7,115 million due to impairment losses and losses associated with project withdrawals, resulting in an overall decline in profit. These results highlight the importance of efficient cost management in maintaining stable profitability and margins.

3. Analysis of the Balance Sheet

According to the balance sheet for the fiscal year ending March 2025, Iwatani reported current assets of JPY 303,189 million and fixed assets of JPY 352,814 million, bringing total assets to JPY 656,003 million. The current ratio stood at approximately 1.08, indicating healthy liquidity and sufficient short-term solvency.

Cash and cash equivalents totaled JPY 33,730 million, ensuring adequate liquidity. Accounts receivable and inventories amounted to JPY 150,389 million and JPY 69,610 million respectively, suggesting efficient asset turnover.

Total liabilities stood at JPY 343,773 million, while the equity ratio remained relatively stable at 44.3%, indicating a solid capital structure.

Interest-bearing debt amounted to JPY 139,195 million, with net interest-bearing debt totaling JPY 105,465 million. Financial leverage remains within an appropriate range, providing the company with the capacity to raise funds for strengthening its growth strategy while maintaining prudent capital management.

4. Analysis of the Cash Flow Statement

According to the cash flow statement for fiscal year 2025, cash flow from operating activities amounted to JPY 51,471 million, showing a significant improvement compared with JPY 13,075 million in the previous year. This reflects effective cash generation from operating activities.

Meanwhile, cash flow from investing activities was negative at JPY -58,414 million, mainly due to capital expenditures related to hydrogen energy projects and investments in new technologies.

Cash flow from financing activities was JPY -2,016 million, reflecting repayments of short-term borrowings and dividend payments.

Overall, the cash flow statement provides an essential source of information for evaluating the company’s financial health and growth strategy. Securing stable free cash flow will serve as a crucial foundation for implementing future business strategies.

5. Future Outlook and Growth Strategy

Looking ahead, further expansion of the Integrated Energy Business and, in particular, growth in the hydrogen energy business are expected. As outlined in the medium-term management plan “PLAN27,” the company is exploring new business opportunities by providing products and services aligned with a decarbonized society.

Growth is also expected in the United States and Southeast Asian markets, particularly through expansion of LP gas market share and a shift toward environmentally friendly products.

From an investment perspective, strategies such as acquiring new customers and increasing market share through M&A will be important. Developing products and services that meet customer needs will also remain essential.

As the company increases its focus on the hydrogen market, responding to rising demand for sustainable energy driven by growing environmental awareness will become increasingly urgent.

In summary, while pursuing strategic growth, Iwatani must adopt flexible management practices to adapt to intensifying competition and changes in the market environment. For investors, these growth strategies represent important factors to monitor, and continued efforts toward sustainable growth are expected.

Going forward, improving cost management, enhancing profitability, and efficiently utilizing capital will be essential, along with the execution of long-term growth strategies.

Overview of the Medium-Term Management Plan “PLAN27” and Growth Strategy

1. Business Environment and Key Challenges

The medium-term management plan **“PLAN27”** announced by Iwatani Corporation serves as a strategic guideline for the company’s operations over the five-year period from 2023 to 2027. The plan was formulated based on a clear recognition of the external environment and challenges facing the company. In particular, it carefully examines the intensifying competition in the energy market and the impact of environmental issues on sustainable corporate growth.

As society as a whole moves toward decarbonization, the importance of hydrogen energy is increasing, and companies are expected to respond to this growing demand. In addition, uncertainties in the global economy stemming from the effects of the COVID-19 pandemic have also influenced the business environment. Under these circumstances, it is essential for the company to leverage its core strengths while identifying new business opportunities.

Experts point out that the ability to understand and adapt to such external conditions is essential for corporate success. In response to intensifying competition, stronger collaboration among business segments is required to generate synergy. Strategic initiatives aimed at entering new business markets and expanding existing operations are therefore increasingly important. Investors should pay close attention to how the company structures its strategies to overcome these challenges and pursue sustainable growth.

2. Overall Strategic Framework

**PLAN27** is Iwatani Corporation’s integrated growth strategy, combining quantitative targets with concrete initiatives, with the **realization of a hydrogen energy society** at its core. The numerical targets for fiscal 2027—operating profit of ¥65 billion, ROE above 10%, and ROIC above 6%—clearly define the strategic path the company intends to pursue. The central theme of the plan is to achieve sustainable corporate growth through the expansion of hydrogen-related businesses and initiatives supporting decarbonization.

Each initiative is designed to be mutually reinforcing, aiming to generate **synergy effects**. In particular, five priority initiatives are explicitly identified: the hydrogen strategy, decarbonization strategy, domestic energy and services strategy, overseas strategy, and non-financial strategy. These initiatives are essential for understanding the company’s overall strategic framework. The next step involves tracking how these initiatives are concretely implemented and moving them into execution.

Investors should carefully evaluate how these initiatives contribute to sustainable growth, particularly whether they are likely to deliver results commensurate with the investment. The company’s ability to respond accurately to rapid market changes and to pursue diversified business development will be a critical factor shaping its future growth.

3. Key Strategic Initiatives (Domestic / Overseas / Business Segments)

“PLAN27” outlines five major strategic initiatives that define the company’s growth strategy. Each initiative is described in detail below.

3.1 Hydrogen Strategy
Iwatani aims to realize a carbon-neutral society through the expansion of its hydrogen-related businesses. Specific initiatives include the construction of new liquefied hydrogen production plants and the development of hydrogen refueling stations, thereby strengthening infrastructure that supports the expansion of domestic supply and demand.

These initiatives are expected to enhance the company’s competitiveness in the rapidly growing hydrogen market while establishing a sustainable business model.

Experts emphasize that the growth of the hydrogen market is irreversible and that early investment during a period of technological innovation is key to maximizing returns. From an investor perspective, it is therefore important to monitor how hydrogen-related initiatives contribute to expanding market share and improving profitability.

3.2 Decarbonization Strategy
Within the decarbonization strategy, key initiatives include the development of environmentally friendly products and the establishment of a CO₂-free hydrogen supply chain. The company is also advancing innovative businesses such as hydrogen production derived from waste plastics, which strengthens its competitive advantage in an era of growing environmental awareness.

These initiatives not only fulfill corporate social responsibility but also position the company to adapt to future regulations and gain stronger support from consumers. They are also directly linked to contributions to the **Sustainable Development Goals (SDGs)**.

For investors, it is important to evaluate how these initiatives contribute to enhancing corporate value and ensuring long-term profitability.

3.3 Domestic Energy and Services Strategy
In the domestic market, Iwatani aims to expand its market share through M&A activities and the introduction of new services in order to counter the gradual contraction of the LP gas market. The company also intends to address challenges faced by local communities, thereby fulfilling its social responsibilities.

Experts note that expanding domestic energy services is essential for maintaining long-term competitiveness. Community-based initiatives are particularly important for gaining consumer support.

Investors should therefore monitor the effectiveness of these initiatives and the extent to which they enhance the company’s competitiveness in the domestic market.

3.4 Overseas Strategy
In terms of international expansion, Iwatani plans to promote the adoption of its products and services in markets such as China and Southeast Asia. The company aims to generate revenue in global markets by implementing flexible strategies tailored to the needs of each region.

As international competition intensifies, success will depend on marketing and product development that reflect regional characteristics. Experts emphasize that strengthening competitiveness in global markets will be critical for future growth.

For investors, the success of these regional expansion strategies will be a key indicator of the feasibility and effectiveness of the company’s broader corporate strategy.

3.5 Non-Financial Strategy
Initiatives aimed at promoting diversity and improving working conditions are also important components of sustainable growth. Efforts such as increasing the proportion of women in management positions are expected to enhance the company’s brand value and corporate reputation.

Corporate social responsibility (CSR) and initiatives related to environmental, social, and governance (ESG) factors also influence investor evaluations. For this reason, these non-financial strategies deserve particular attention.

Investors should analyze how these initiatives contribute to sustainable corporate growth and how they may influence the company’s future performance.

4. Investment Policy (Capital Expenditures / R&D, etc.)

Under **PLAN27**, Iwatani Corporation has established a plan to invest a total of ¥470 billion over five years, focusing on growth investments and foundational initiatives. The specific investment areas are divided into the hydrogen strategy, industrial gases and machinery business, energy business, materials business, and digitalization.

4.1 Investments Related to the Hydrogen Strategy

Investments in the hydrogen strategy are planned at ¥178 billion, primarily directed toward the construction of liquefied hydrogen production plants and hydrogen stations. This is intended to strengthen the hydrogen-centered energy supply chain.

The growth of the hydrogen energy market is considered inevitable, and early-stage investments are expected to generate future returns. Investors should pay close attention to how these investments contribute to profitability and the expansion of market share.

4.2 Industrial Gases and Machinery Business
Investments of ¥270 billion are allocated to the industrial gases and machinery business, with particular emphasis on enhancing production capacity to meet growing demand in Asia and North America. This is aimed at solidifying the company’s position as a growth segment.

Experts predict that these investments could significantly enhance the company’s overall competitiveness and future earnings potential. Investors should focus on how these investments contribute to the company’s overall performance.

4.3 Expansion of the Integrated Energy Business

A total of ¥70 billion is allocated to M&A and regional service expansion in the integrated energy business, aiming to increase market share. The company demonstrates a proactive approach to securing new customer bases and addressing regional community challenges.

These initiatives not only enhance competitiveness but also fulfill the company’s social responsibilities in local communities. Investors are encouraged to monitor how these initiatives impact the company.

5. Expected Outcomes, Benefits, and KPIs

In the medium-term management plan **PLAN27**, clear numerical targets are established as growth indicators, and KPIs are set to visualize outcomes. Targets such as operating profit of ¥65 billion, ROE of 10%, and ROIC of 6% or higher serve as key benchmarks for achieving sustainable growth.

These KPIs are critical for measuring the execution of corporate strategy and are expected to reflect results in conjunction with rapid responses to market changes and technological innovation. Achieving these targets also contributes to enhancing the company’s credibility and investor confidence.

Investors should carefully monitor how each KPI evolves over time and assess how effectively the underlying initiatives are performing. This enables a practical basis for decision-making from the perspective of sustaining long-term corporate growth.

Overall, this framework structurally organizes how Iwatani Corporation’s initiatives under the medium-term management plan contribute to growth and highlights the points that investors should watch closely. The integration of sustainability and growth strategy is expected to create value for both the company and its investors.

News & Topics

1. Achievements of the “PLAN23” Management Plan and Transition to “PLAN27”

Under its medium-term management plan **“PLAN23,”** Iwatani Corporation achieved its target of JPY 47.0 billion in ordinary profit one year ahead of schedule. This result was driven by the expansion of the LP gas customer base, increased sales of cassette stoves and cassette gas cartridges, and growth in the Industrial Gas & Machinery Business, particularly in air separation gases and liquefied hydrogen.

Based on these achievements, the company has transitioned to the newly established **“PLAN27”** strategy, which focuses on promoting initiatives aimed at building a sustainable energy society.

Specifically, strengthening initiatives toward a decarbonized society has become the central theme, with a focus on expanding the liquefied hydrogen business. Particular emphasis is placed on the development of hydrogen refueling stations and the establishment of hydrogen supply systems for fuel cell commercial trucks. In addition, the company aims to evolve into a comprehensive energy lifestyle service provider while strengthening its digital strategy. Expansion of overseas operations is also included in the plan, particularly in Asian markets.

This transition suggests that Iwatani is well positioned for further growth based on its strong customer base, and investors may have reason to expect continued development in the coming years.

2. Specific Initiatives and Progress

Within the Integrated Energy Business, one of Iwatani’s major achievements has been reaching 1.1 million direct LP gas customers. This growth has been supported by improved approaches to energy consumers, logistics optimization, and increased sales of energy equipment. In particular, sales of cassette stoves reached 4.2 million units.

In the Industrial Gas & Machinery Business, liquefied hydrogen sales volume reached 7.7 million cubic meters, with a new target of 9.0 million cubic meters expected to be set. Notably, demonstration tests for international transport using liquefied hydrogen carriers have also been successful, potentially strengthening the company’s global competitiveness in the future.

Furthermore, Iwatani has carried out several M&A transactions involving companies such as **Enelife** and **Tokico System Solutions** in order to establish new customer bases. These initiatives are expected to improve operational efficiency and enhance service offerings, thereby contributing to improved profitability in the future.

Because these initiatives strengthen the foundation for both short-term earnings improvements and long-term sustainable growth, they warrant close attention from investors.

3. Implementation of the Decarbonization Strategy

Within **“PLAN27,”** the decarbonization strategy is given particular emphasis, including the development of a CO₂-free hydrogen supply chain. Hydrogen production projects in the Asian region are progressing steadily through cooperation with companies such as Stanwell Corporation and Kansai Electric Power.

These initiatives are expected to contribute to the future development of the hydrogen market. In addition, efforts are being made to expand the adoption of fuel cell commercial vehicles, which can significantly reduce CO₂ emissions.

From an environmental perspective, these initiatives have generated high expectations within society and are also closely linked to improving corporate value. Investors should therefore carefully evaluate market trends, regulatory developments, and the competitive landscape associated with decarbonization strategies while considering their long-term profit potential.

4. Other Important News

In 2023, Iwatani announced the establishment of a joint venture with Cosmo Energy Holdings. Through this collaboration, both companies aim to leverage their respective resources to expand hydrogen-related businesses. Cosmo Energy possesses offshore-related technologies, and the two companies intend to jointly promote the development of the hydrogen market.

The company has also addressed its dividend policy, stating that it aims to achieve a dividend payout ratio of at least 20% by fiscal year 2027. This policy reflects a strong commitment to shareholder returns and suggests the implementation of a stable dividend policy aligned with profit growth.

Such developments provide a broader perspective on the company’s growth strategy. Investors should therefore monitor how corporate earnings evolve and how shareholder value is enhanced over time.

5. Conclusion and Outlook

Through **“PLAN27,”** Iwatani Corporation is outlining a strategy aimed at realizing a decarbonized society while pursuing growth grounded in sustainability. The promotion of hydrogen energy, digital strategies, and the effective utilization of public resources are expected to contribute to improved corporate profitability.

As climate change measures increasingly become a central component of corporate growth strategies, the actions of Iwatani are likely to attract significant attention. It will be important for the company to continue building a strong foundation for growth while carefully considering the impact of competition and external factors.

By continuing to monitor Iwatani’s strategic developments and their impact on the market, investors will be able to gain valuable insights for making informed investment decisions.

Company Overview

1. Basic Corporate Information

**Iwatani Corporation (IWATANI CORPORATION)** is a Japanese energy trading company established in 1930 in Osaka City. Its official headquarters is located at **3-6-4 Honmachi, Chuo-ku, Osaka, Osaka Prefecture**, and the company operates approximately 300 locations across Japan. Its main businesses include the production and sale of LP gas, liquefied natural gas (LNG), industrial gases (such as oxygen, nitrogen, and hydrogen), as well as related machinery and materials. Through these activities, the company contributes to the realization of a sustainable society.

The company is led by **President and CEO Hiroshi Majima**. Iwatani has a capital base of JPY 35.0 billion and has been listed on the **Prime Market of the Tokyo Stock Exchange since 2022**.

One of the company’s core strengths lies in the technological capabilities and customer base it has developed over its long history. In particular, it possesses extensive experience and expertise in the energy business, enabling it to maintain strong competitiveness. At the same time, the company actively explores new business models related to energy, demonstrating leadership toward a sustainable future.

For investors, Iwatani represents an important player in the energy supply sector with a stable foundation for growth. This stability is supported not only by its community-based business development but also by ongoing innovation aimed at contributing to a sustainable society.

2. Business Activities and Structure

Iwatani’s operations are broadly divided into three major segments.

The first is the **Integrated Energy Business**, which supplies LP gas and LNG for both residential and commercial use.

The second is the **Industrial Gas & Machinery Business**, which provides industrial gases such as oxygen, nitrogen, and hydrogen, as well as the manufacturing and sale of machinery related to incineration plants and welding technologies.

The third is the **Materials Business**, which focuses on the development and sale of specialized materials and contributes to the advancement of cutting-edge technologies.

A particularly notable initiative is the company’s commitment to **hydrogen energy**. Iwatani operates liquefied hydrogen production facilities and is actively developing hydrogen refueling stations. Through these initiatives, the company is establishing itself as a pioneer in the transition toward a future clean energy society.

Such strategies are expected to create new revenue opportunities in emerging growth markets while further strengthening the company’s contribution to environmental sustainability.

For investors, understanding these diverse business segments is essential to recognizing Iwatani’s strong competitive position in the market. In particular, expansion of the hydrogen energy business may become a key driver of future growth.

3. Major Subsidiaries and Affiliated Companies

Iwatani has an extensive network of subsidiaries, with a total of **157 companies** under its corporate umbrella. This includes **105 consolidated subsidiaries** and **51 non-consolidated subsidiaries accounted for using the equity method**, each contributing specialized expertise within the company’s various business segments.

This organizational structure plays an important role in enhancing synergy across the group while enabling each subsidiary to leverage its strengths.

Notably, **New Cosmos Electric** and **Cosmo Energy Holdings** are prominent equity-method affiliates. Through collaboration with these companies, Iwatani is exploring new business models and expanding its hydrogen-related operations, which form an important part of its future growth strategy.

By considering this broad network of subsidiaries and affiliates, investors can better understand the diversification of Iwatani’s business model and its long-term growth strategy. In particular, understanding the synergy created through partnerships with affiliated companies can help investors form a clearer investment outlook.

4. Organizational and Human Resource Structure

Iwatani’s organizational structure is designed for high efficiency, allowing management to leverage expertise across different business segments while making quick and effective decisions.

President **Hiroshi Majima**, along with **Vice Chairman Toshio Watanabe** and **Head of the Hydrogen Division Manabu Tsuyoshi**, plays key roles in driving the company’s strategy based on their extensive experience.

Within the organization, a strong management system has been established to promote technological innovation and sustainable growth. The introduction of an executive officer system enables faster decision-making while clearly separating the roles of directors and executive officers, thereby enhancing transparency and corporate governance.

For investors, a well-established organizational structure provides assurance of the company’s capacity for sustainable growth. Transparent governance and strong leadership are important factors in evaluating corporate reliability. Understanding how organizational flexibility and leadership quality influence corporate performance can also play an important role in investment decision-making.

5. Research and Development Structure

Iwatani places strong emphasis on technological innovation and maintains a research and development framework designed to support sustainable corporate growth. In particular, the company is actively engaged in R&D related to hydrogen energy, promoting the development of new technologies aimed at realizing a clean energy society.

These efforts include research on hydrogen production technologies and fuel cells, which are expected to create new business opportunities and establish a sustainable energy supply infrastructure.

Such R&D initiatives strengthen Iwatani’s competitive advantage and enhance its ability to respond flexibly to future market needs. Technological innovation with a strong focus on environmental considerations is also highly valued from an **ESG (Environmental, Social, and Governance)** perspective, which has become increasingly important to investors in recent years.

Investors are therefore encouraged to understand how the company’s development of new technologies will enhance its competitiveness and enable sustainable growth. Evaluating the impact of R&D progress on the company’s future prospects is an important part of investment analysis.

6. ESG and Sustainability Initiatives

Iwatani is actively engaged in initiatives aimed at realizing a sustainable society, and its approach to **ESG (Environmental, Social, and Governance)** is deeply integrated into its corporate strategy.

In response to growing awareness of environmental issues and government policies promoting renewable energy, hydrogen energy has become a central element of the company’s business portfolio. Initiatives such as the construction of hydrogen refueling stations and the production of liquefied hydrogen represent key efforts toward establishing a sustainable energy supply system and are expected to form a core driver of future growth.

Such ESG-focused initiatives also serve as an important evaluation criterion for investors. Companies that emphasize environmental sustainability are often viewed favorably for fulfilling their social responsibilities while conducting business operations, which tends to attract stronger shareholder support.

At Iwatani, systems have been established to comprehensively report the results of environmental initiatives, ensuring transparency and strengthening trust with stakeholders.

The advancement of ESG initiatives is expected to enhance the company’s overall evaluation and contribute to long-term growth. For investors, paying close attention to the company’s efforts in social value creation and sustainability will remain an important aspect of future investment decisions.

In the following chapters, the report will further analyze Iwatani’s growth strategies and key investment points, providing clear insights for investors.

Shareholder Returns

1. Dividend Policy and History

Iwatani Corporation has established a fundamental policy of providing **sustainable returns to shareholders**, and this philosophy is clearly reflected in its medium-term management plan **“PLAN27.”** Specifically, the company aims to raise its dividend payout ratio to **over 20% by fiscal year 2030**, a policy regarded as an important measure to meet shareholder expectations.

Over the past several years, the company has steadily increased its dividends. In fiscal year 2023, a dividend of **JPY 32.50 per share** was paid, and the company planned a **total annual dividend of JPY 47 per share**. These dividend payments have been supported by management focused on sustainable growth and profitability, and the company has demonstrated flexibility in responding to changes in the business environment.

A key background factor is that dividend stability is an important element in gaining shareholder trust and maximizing corporate value. This dividend policy goes beyond simple profit distribution and is closely linked with the company’s growth strategy and capital management policy. In addition, the introduction of **interim dividends starting in fiscal year 2024** is intended to increase the frequency of shareholder returns, which is expected to further strengthen relationships with shareholders.

Therefore, Iwatani’s dividend policy is designed to support sustainable growth while continuing to meet shareholder expectations.

These initiatives not only involve the payment of dividends as numerical figures but also contribute to building a foundation that ensures sustainable growth based on actual business performance. Continued increases in profits are expected to support the company’s dividend policy in the future, creating opportunities for shareholders to achieve greater returns.

2. Share Repurchases and Their Impact

Share repurchases represent one of the key measures implemented by Iwatani to enhance shareholder value. By buying back its own shares from the market, the company reduces the number of shares outstanding, which can lead to an increase in **earnings per share (EPS)**. This measure is considered a direct method of returning value to shareholders and also signals confidence in the company’s growth prospects.

Share repurchases provide several advantages. First, reducing the number of outstanding shares directly contributes to improving EPS, which increases the value of shareholders’ assets. In addition, when a company repurchases its own shares, it can demonstrate confidence in its growth potential to the market, which may contribute to stabilizing the stock price.

Such a message can strengthen the company’s credibility among investors and is therefore important for gaining long-term support.

However, share repurchases also require careful consideration. If market conditions or corporate performance change significantly, allocating capital to share buybacks may limit funds available for growth investments. From a risk management perspective, it is therefore essential to establish appropriate financial planning before conducting share repurchases.

For this reason, Iwatani adopts a policy of closely analyzing market conditions and executing share buybacks at appropriate times in order to balance management stability with growth strategies.

Thus, share repurchases at Iwatani are not merely intended to provide short-term support for stock prices but are also positioned as a tool for enhancing long-term corporate value. As a shareholder return measure, share repurchases are expected to continue playing an important role while strengthening trust between the company and its shareholders.

3. Current Status and Outlook of Total Shareholder Return Ratio

The **total shareholder return ratio** indicates the proportion of profits returned to shareholders and is also an important management indicator for Iwatani. The company carefully determines this ratio from the perspective of delivering shareholder value through both dividend payments and share repurchases.

Specifically, the company has established a target of achieving a **dividend payout ratio of over 20% by fiscal year 2030**, and initiatives aimed at achieving this target are currently underway.

Looking at dividend performance in fiscal year 2023, dividends based on net income amounted to **JPY 32.50 per share**, suggesting that the foundation for improving the overall shareholder return ratio is gradually being established. As further profit growth is expected in the future, these initiatives are likely to strengthen shareholder trust and serve as a key factor in securing long-term support.

In addition, Iwatani intends to leverage its relationship with **Cosmo Energy Holdings** to maximize benefits from equity-method income while maintaining an appropriate dividend policy. Through these measures, the company aims to stabilize its overall shareholder return ratio.

Ensuring consistency in shareholder returns also requires rational capital management from a long-term business perspective. Initiatives that utilize funds generated through improved capital efficiency to achieve higher returns will likely be positively evaluated.

Thus, Iwatani’s total shareholder return ratio is expected to serve as an important guideline for enhancing both corporate growth and shareholder satisfaction, making it a key topic to monitor going forward.

4. Financial Soundness and Shareholder Return Strategy

A company’s financial soundness forms the foundation for maintaining a sustainable shareholder return strategy. Iwatani places strong emphasis on maintaining a healthy financial position while balancing growth investments and shareholder returns.

Specifically, the company aims to optimize its capital structure by improving its equity ratio while appropriately utilizing interest-bearing debt.

In recent years, as domestic and international market conditions have become more complex, the need for flexibility in capital policy has increased. Prudent financing and the effective use of surplus funds for dividends and share repurchases contribute to improving the quality of shareholder returns.

Securing stable cash flows is extremely important for achieving corporate growth, as it enables the company to meet shareholder expectations while continuing to invest in future growth.

Furthermore, strengthening **corporate governance** also contributes to improved financial soundness. By reviewing the structure and terms of its board of directors and establishing a more robust governance framework, the company aims to enhance management transparency and efficiency.

Such initiatives are expected to strengthen investor confidence and increase expectations for shareholder returns.

Overall, Iwatani’s shareholder return strategy is built on a foundation of strong financial health and seeks to balance growth-oriented investments with shareholder returns.

5. Investor Communication and Trust

Effective communication with investors is essential for Iwatani to achieve its shareholder return objectives. To gain shareholder trust, the company must provide transparent information disclosure and clearly communicate its policies and strategies.

Through **shareholder meetings and investor relations (IR) activities**, the company strives to communicate its management strategy and shareholder return policies in a clear and accurate manner.

In recent years, growing interest in **ESG (Environmental, Social, and Governance)** factors has also influenced investor perspectives. Investors increasingly evaluate companies based on their sustainability initiatives and commitment to social responsibility.

Recognizing this trend, Iwatani is strengthening its corporate governance framework and making efforts to reflect shareholder opinions in its management decisions. This approach is expected to further strengthen the trust relationship between the company and its shareholders and contribute to the realization of long-term returns.

Going forward, the company will need to continue prioritizing dialogue with investors and explore ways to incorporate shareholder feedback into its management strategy.

As corporate growth and shareholder returns are closely interconnected, building relationships through **two-way communication** will further strengthen the company’s shareholder return initiatives.

Overall, Iwatani’s shareholder return initiatives can be evaluated from multiple perspectives, including a clearly defined dividend policy, the implementation of share repurchases, financial soundness, and enhanced communication with investors.

These measures demonstrate that shareholder returns are closely aligned with the company’s growth strategy and reflect its commitment to achieving sustainable growth. As the business environment continues to evolve, the company is expected to remain flexible while continuing to create value for shareholders.

Business Risks

1. Factors Affecting Business Performance

Iwatani Corporation operates three major business segments: **energy**, **industrial gases**, and **materials**. The performance of each segment is influenced by a variety of external factors. In particular, fluctuations in the market prices of **LP gas** and **liquefied natural gas (LNG)** have a direct and significant impact on revenue and profitability.

These prices are heavily affected by supply–demand balances in international markets, trends in crude oil prices, and geopolitical risks. As a result, Iwatani’s business performance is highly sensitive to such external developments. In addition, the consumption of LP gas is influenced by seasonal factors. Demand typically increases during the winter season and declines during the summer, causing overall earnings to be weighted toward the second half of the fiscal year.

Beyond these seasonal factors, abnormal weather conditions or natural disasters may also cause large fluctuations in demand. Furthermore, the company’s hydrogen business—an area targeted for future growth—can be affected by government policies and the level of market maturity. Consequently, flexible strategies that take all these factors into account are required.

Because Iwatani’s performance is influenced by a wide range of variables, accurate risk analysis is essential. In particular, careful monitoring of economic trends and international conditions, along with rapid strategic adjustments, will be key to maintaining stable performance. Investors are therefore encouraged to pay close attention to these sources of volatility.

2. Industry-Specific Risks

The energy and gas industries in which Iwatani operates face several inherent risks, including **regulatory risk, competitive risk, and environmental risk**.

First, regulatory risk is particularly important given the nature of the industry. Companies that handle high-pressure gases and LP gas are subject to strict laws and safety standards. Violations may result in penalties and economic losses. In recent years, energy policies and environmental regulations have become increasingly stringent, and companies that fail to adapt to these changes risk falling behind in market competition.

In addition, competitive risk cannot be overlooked. While large corporations dominate significant shares of the energy market, competition from new entrants and technological innovation is increasing. In particular, the expansion of renewable energy and hydrogen energy is intensifying price competition, requiring Iwatani to further differentiate itself from competitors. In such a competitive environment, establishing appropriate pricing strategies and sales policies is critically important.

Environmental risk is another major consideration. As global decarbonization efforts accelerate in response to climate change, companies dealing with fossil fuels face increasing environmental pressure. Although Iwatani is actively promoting its hydrogen business, the development of products that meet evolving customer demands remains essential. At the same time, building an organizational framework capable of responding flexibly to stricter environmental regulations is indispensable for achieving sustainable growth.

Thus, Iwatani faces a variety of industry-specific risks, and the ability to adapt quickly to changes is essential for stable management. Investors should understand these risks and evaluate the company’s strategies from a long-term perspective.

3. Financial and Management Risks

A variety of financial and managerial risks also exist within Iwatani’s operations. First, regarding financing, large amounts of capital are required for capital investments and mergers and acquisitions (M&A), which increases the company’s reliance on external financing.

Companies that raise funds through bank loans or corporate bond issuance are particularly sensitive to changes in economic conditions, credit risk, and interest rate trends. If interest rates rise, borrowing costs may increase, potentially affecting long-term profitability. Therefore, strict financial management is essential.

Another important factor is **counterparty credit risk**. Iwatani relies on numerous business partners, and deterioration in the creditworthiness of these partners could make it difficult to recover receivables. Consequently, regular credit assessments and evaluations are necessary, and in some cases contractual terms with business partners may need to be revised. Building a diversified network of business partners is also important for risk hedging.

Furthermore, governance issues cannot be ignored. Ensuring transparency and compliance with laws and regulations directly affects corporate credibility. Strengthening risk management systems and internal auditing functions is therefore important from the perspective of maintaining social trust.

Although Iwatani faces diverse financial and management risks, effectively addressing them can enable the company to achieve sustainable growth. Investors should understand not only the risks themselves but also the importance of strengthening the company’s risk management framework.

4. Overseas Expansion Risks

Overseas expansion is an important element of Iwatani’s growth strategy, but it also involves various risks. In particular, operating in foreign markets involves **political, economic, and legal risks**.

When entering overseas markets, unstable political or economic conditions in host countries may affect the sustainability of business operations. Companies must therefore assess risks in target countries in advance and adapt to local markets through flexible strategies and localization.

In regions such as the Middle East and Africa, geopolitical risks are relatively high. Unexpected regime changes, civil conflicts, or economic sanctions may negatively affect corporate activities.

In addition, **foreign exchange risk** is a significant factor. Overseas transactions are rarely conducted in Japanese yen, and fluctuations in exchange rates may directly affect corporate earnings. Therefore, implementing appropriate hedging strategies is essential.

Differences in legal regulations also present challenges. Each country has its own laws and regulations, and energy-related regulations are particularly strict. Failure to comply may result in severe penalties. Accordingly, companies must fully understand local legal and regulatory frameworks before expanding their businesses abroad.

Although overseas expansion involves risks, it also creates opportunities for entering new markets. Careful planning is therefore required. Investors should pay close attention to the company’s risk management systems that support its global strategy.

5. ESG-Related Risks

In recent years, interest in **ESG (Environmental, Social, and Governance)** factors has increased significantly in corporate management. Iwatani is responding to growing social demands regarding environmental responsibility and stricter regulations, and it is working to build a sustainable business model.

However, developing new technologies aligned with decarbonization trends and adapting to environmental regulations require substantial investment. Delays or unforeseen difficulties in these initiatives could potentially affect corporate value.

Companies that fail to engage in environmentally responsible activities also risk losing support from consumers. As climate-related regulations become stricter, a company’s contribution to environmental sustainability is increasingly linked to its competitiveness.

Furthermore, if an appropriate governance structure is not established, the risk of losing social trust increases. Therefore, companies must place strong emphasis on transparency in their management practices.

In this way, ESG-related initiatives have a major impact on a company’s long-term growth and represent an important evaluation criterion for investors. Companies must strengthen risk management from an ESG perspective while promoting transparent and effective measures.