IWATANI CORPORATION

Business Details

Supplies residential, commercial, and industrial LP gas nationwide from approximately 300 locations under the "MaruiGas" brand, while also providing LNG, petroleum products, portable gas stoves, gas cartridges, Ene-Farm units, GHPs, mineral water, electricity, and other general lifestyle infrastructure. It is the only company in Japan with an integrated LP gas supply chain from import to retail, and its detailed service leveraging sales, logistics, and safety management systems is the source of its competitive advantage. In FY2026 (ending March 2026), external customer sales were ¥367,732 million, making it the largest segment, accounting for approximately 40% of consolidated sales.

Recent Overview

A ¥5.9 billion profit decline due to LP gas market conditions hit hard, with operating profit down ¥6.0 billion year on year to ¥13.4 billion

In FY2026 (ending March 2026), the Comprehensive Energy Business saw a decrease in sales as the average annual LP gas import price (CP) fell to $549 per ton from $612 per ton in the prior period. On the profit side, while the LP gas retail division saw increased sales volume and improved profitability, a decline in wholesale sales volume and market conditions (a ¥5.9 billion profit decrease year on year) weighed on results, causing operating profit to fall to ¥13,498 million (down ¥6,021 million year on year). Portable gas stoves and gas cartridges also performed sluggishly both domestically and internationally.

Key Products

Growth Drivers

• Expansion of the LP gas direct-sales customer base through M&A (including profitability improvement through logistics rationalization)
• Continued increase in sales volume and profitability improvement in the LP gas retail division
• Diversification of earnings through expanded sales of energy-related equipment (Ene-Farm, GHP, etc.)
• Capturing new demand through the development of decarbonization products such as carbon-offset gas and green LP gas
• Maintaining and expanding the customer base through the promotion of fuel conversion (low-carbon initiatives)
• Expanding the overseas cartridge gas business, mainly in Southeast Asia, and developing new products

Risks

• Market volatility risk in LP gas import prices (CP: Saudi Aramco contract price) (inventory valuation losses and wholesale margin compression during price declines)
• Structural decline trend in sales volume in the LP gas wholesale division
• Rising procurement costs and supply stability risks due to escalating tensions in the Middle East, etc.
• Continued risk of sluggish domestic and overseas sales of portable gas stoves and cartridges
• Declining profitability due to rising personnel and logistics costs, etc.
• Long-term risk of shrinking residential LP gas demand due to energy transition (electrification and conversion to city gas)

Business Details

Operates industrial gases such as Air Separation Gas (oxygen, nitrogen, argon), hydrogen, and helium, as well as a machinery business including gas production and supply equipment, welding equipment, semiconductor manufacturing equipment, and hydrogen station equipment. Serves a wide range of industrial customers including electronic components, automobiles, space development, and decarbonization, meeting customer needs with technical capabilities developed over many years and a broad lineup of gas and machinery products. The hydrogen business, which boasts a 100% domestic share of liquid hydrogen, is positioned as a future growth pillar.

Recent Overview

Hydrogen and Air Separation Gas saw increased sales, but profit declined due to helium softening and a decrease in automotive-related machinery

In FY2026 (ending March 2026), the Industrial Gas & Machinery Business achieved increased sales of ¥288,730 million (up ¥17.2 billion year on year, +6.4%), driven by increased sales of hydrogen gas and hydrogen-related equipment and steady performance in Air Separation Gas for the electronic components and optical fiber industries. However, operating profit declined to ¥15,414 million (down ¥2.1 billion year on year, -12.3%) due to reduced specialty gas profitability from softening helium market conditions and decreased shipments of machinery equipment for the automobile industry. For the next fiscal year, the company forecasts operating profit of ¥185 million (+20.0% increase) and plans a significant increase in capital expenditure to ¥31.0 billion, up from ¥22.0 billion in the current period.

Key Products

Growth Drivers

• Expansion of the hydrogen business: backed by a 100% domestic share of liquid hydrogen, sales of hydrogen gas and hydrogen-related equipment increased again in FY2026 (ending March 2026). Nippon Hydrogen Energy Co., Ltd. is advancing large-scale supply chain construction, including signing a shipbuilding contract for the world's largest 40,000 cubic meter liquid hydrogen carrier
• Demand for Air Separation Gas from the electronic components and optical fiber industries: sales volume remained steady in FY2026 (ending March 2026) as well. Expanded sales to the data center and AI markets are also a focus area
• Capturing decarbonization-related demand: strengthening sales of hydrogen and ammonia and promoting commercialization of a low-carbon hydrogen supply chain are positioned as key initiatives for the next fiscal year
• Efforts toward realizing a hydrogen energy society based on the medium-term management plan PLAN27: conducting on-site trials of fuel-cell-equipped medium-sized hydraulic excavators at construction sites, advancing infrastructure development to expand hydrogen use at construction sites, etc.
• Significant expansion of next-term capital expenditure: the next investment plan for the Industrial Gas & Machinery Business is ¥31.0 billion (+41% from the current period's ¥22.0 billion), continuing active investment

Risks

• Risk of softening helium market conditions: market volatility, mainly centered on China, directly affects specialty gas profitability and was a major cause of the profit decline in FY2026 (ending March 2026) as well. The outlook for market recovery remains uncertain
• Demand fluctuation risk for machinery equipment for the automobile industry: shipments of equipment for the automobile industry decreased again in FY2026 (ending March 2026), pushing down overall profit for the machinery equipment business
• Risk of rising procurement and logistics costs: responding to rising procurement and logistics costs for Air Separation Gas and specialty gases is explicitly stated as a key focus area for the next fiscal year
• Burden of upfront investment in the hydrogen business: large-scale infrastructure investment is being made ahead of returns, and continued investment, including the next-term capital expenditure plan of ¥31.0 billion, poses a risk of pressuring profitability
• Geopolitical risk: impact on raw material procurement and demand from escalating tensions in the Middle East and stagnant Japan-China relations. The company is responding by utilizing stockpiling facilities to ensure stable supply of helium and other resources

Business Details

Handles PET resin, biomass fuel, secondary battery materials, mineral sands, rare earths, electronic semiconductor materials, stainless steel, aluminum, display film, and more. With a customer base ranging from consumer goods for food packaging to critical mineral resources and next-generation automotive materials, the company is pursuing business expansion through the promotion of environmental products and strengthening of overseas operations. While the stainless steel business is expanding through new consolidations and the Australian mineral sands business is moving into full-scale operation, declining profitability at the company's own mining areas remains a challenge.

Recent Overview

Sales increased but profit declined slightly, weighed down by declining mineral sands profitability and decreased functional film sales

In FY2026 (ending March 2026), the Materials Business achieved increased sales of ¥218,377 million (up ¥16,692 million year on year). This was driven by sales growth from strengthened stable supply of rare earths, steady performance in biomass fuel, secondary battery materials, low-environmental-impact PET resin, and resin products for food packaging, as well as increased stainless steel sales from new consolidations. On the other hand, operating profit was only ¥11,613 million (a slight decrease of ¥135 million year on year). Declining profitability at the company's own mining areas in Australia and decreased sales volume of functional films weighed on profit. For the next fiscal year, the company plans to begin sales of Norwegian green titanium ore, promote the recycled PET business, and expand business scale by leveraging domestic stainless steel processing facilities.

Key Products

Growth Drivers

• Strengthening the stable supply system for critical mineral resources such as rare earths (building a rare earth refining plant through investment in France's Carester)
• Beginning sales of Norwegian green titanium ore (Nordic Mining)
• Stable operation and improved productivity through the acquisition of new mining areas for the Australian mineral sands business
• Promotion of the recycled PET business and expanded sales of low-environmental-impact PET resin and resin products for food packaging
• Expansion of the stainless steel business through new consolidations and business scale expansion through utilization of domestic processing facilities
• Expanded sales in environmental and next-generation automotive growth areas such as biomass fuel and secondary battery materials
• Strengthened efforts to secure stable supplies of critical mineral resources in Europe, the US, and Asia

Risks

• Declining profitability at Australian company-owned mining areas (mineral sands business)
• Decreased sales volume of functional films
• Risk of rising rare earth procurement costs due to continued Chinese export restrictions
• Risk of declining sales prices due to falling stainless steel market conditions
• Delayed demand recovery for secondary battery materials for next-generation automobiles
• Geopolitical and foreign exchange risks in overseas mining and resource operations

Business Details

The "Others" segment aggregates various businesses not included in Iwatani Group's three reportable segments, operating businesses such as food, livestock, finance, insurance, transportation, security, and information processing. While small in scale relative to the group's total sales of ¥908,522 million, with external customer sales of ¥33,681 million (approximately 3.7% of the total), total sales including intragroup sales of ¥27,473 million reach ¥61,155 million, indicating that this segment also plays a role in providing services within the group.

Recent Overview

External customer sales increased ¥2,588 million year on year, and operating profit also increased ¥211 million

In FY2026 (ending March 2026), the "Others" segment recorded external customer sales of ¥33,681 million (up ¥2,588 million year on year) and operating profit of ¥3,517 million (up ¥211 million year on year). Intragroup sales remained roughly flat at ¥27,473 million compared to the prior period. Segment assets increased significantly to ¥101,396 million from ¥86,551 million in the prior period, indicating an expansion of the business base. Despite the impact of changes in the scope of consolidation (3 newly added companies, 8 excluded companies), the segment achieved both increased sales and increased profit.

Key Products

Growth Drivers

• Intragroup sales (¥27,473 million) exceeded external sales, with expanded internal demand linked to the growth of each group business supporting earnings
• External customer sales increased by ¥2,588 million year on year, indicating progress in expanding external-facing businesses
• Segment assets increased by ¥14,845 million year on year, indicating ongoing expansion of the business base

Risks

• High dependence on intragroup sales, posing a risk that a downturn in the performance of the three main segments would directly pressure earnings
• Volatility in performance due to changes in the scope of consolidation (3 newly added companies, 8 excluded companies)
• Risk of raw material price fluctuations and demand volatility in the food and livestock field
• Risk of rising personnel and logistics costs in the information processing, transportation, and security businesses