HOKKAIDO GAS CO., LTD.
9534・Prime Market・Electric Power & Gas
Business
Hokkaido Gas Co., Ltd., founded in 1911, is the largest City Gas operator in Hokkaido, with its main supply areas covering Sapporo, Hakodate, Otaru, Chitose, Kitami, and Muroran. The group comprises 22 companies, including 9 consolidated subsidiaries and 8 equity-method affiliates. Centered on City Gas manufacturing, supply, and sales, the group operates a wide range of businesses including electricity retail, LPG, heat supply, gas construction, appliance sales, IT Solutions, and real estate. In FY2026 (ending March 2026), the number of installed meters reached 606,177 and the number of electricity customers reached 257,271, supplying energy broadly to residential, commercial, and industrial uses across Hokkaido.
Business Model
The company owns and leases large-scale infrastructure such as the Ishikari LNG Base, and manufactures and supplies City Gas using LNG as raw material. It has a mechanism to pass raw material price fluctuations through to charges via a raw material cost adjustment system, maintaining a stable billing structure of basic charges plus usage-based charges. For Electricity, the company aims to increase customer unit prices by expanding bundled contracts with Gas, and the Energy-Related and Other segment has a multi-layered revenue structure that builds up added value through construction, appliances, heat supply, and IT.
Company Strengths
Secures LNG production capacity of 693,287 thousand m³ (up 5.6% year on year) across three sites in Ishikari, Hakodate, and Kitami, with 606,177 attached meters. The average household penetration rate across supply areas is 52.0%, reaching 72.9% in the Otaru area. Supply areas have been further expanded through the consolidation of Muroran Gas Co., Ltd. as a subsidiary, giving the company a regional infrastructure base that is difficult for competitors to replicate in a short period.
The number of Electricity customers has continued to grow since the 2016 retail liberalization, reaching 257,271 as of the end of FY2026 (ending March 2026) (up 662 year on year). The company surpassed 100,000 customers in 2018 and 200,000 in 2021. Mass PR and campaigns to expand Gas and Electricity set contracts continue to be rolled out, and a group-wide customer acquisition framework forms a competitive advantage.
Obtained an "A+ (Stable)" rating from both of Japan's two domestic credit rating agencies, Japan Credit Rating Agency (JCR) and Rating and Investment Information (R&I). Free cash flow for FY2026 (ending March 2026) was a positive ¥10,496 million, and interest-bearing debt was reduced by ¥8,540 million to ¥60,613 million. The equity ratio improved to 49.1%, maintaining a stable funding base.
ENVALITH's Perspective
Performance Trend
Revenue expanded sharply from ¥126,958 million in FY2022 (ended March 2022) to ¥174,840 million in FY2023 (ended March 2023), then went through an adjustment phase, falling to ¥173,885 million in FY2024 (ended March 2024) and ¥170,295 million in FY2025 (ended March 2025), before recovering to a record-high level of ¥174,519 million in FY2026 (ending March 2026). Operating profit also reached ¥16,437 million, the highest in the past five fiscal years. As an external factor, despite crude oil prices (All Japan CIF) declining from $82.68/barrel in the previous period to $71.48/barrel, volume expansion—with total Gas sales volume up 5.8% and Electricity sales volume up 1.9%—drove earnings. The equity ratio improved to 49.1%, strengthening the financial structure as well. However, for FY2027 (ending March 2027), ordinary profit is forecast to decline sharply to ¥13,000 million (down 21.2% year on year), as increased upfront costs for DX and renewable energy investment along with a deterioration in the Electricity business's earnings will weigh on profitability in the near term.
Growth Strategy
Under Challenge2030, the company aims to achieve sales of ¥200,000 million through the expansion of natural gas adoption, renewable energy growth, and DX utilization
The company aims to improve operational efficiency by continuing to expand the number of installed meters (606,177 units at the end of FY2026 (ending March 2026)) and promoting single-metering construction for heating and cooking. Total Gas sales volume steadily expanded to 684,628 thousand ㎥, up 5.8% year on year, and is projected to reach 687 million ㎥ in FY2027 (ending March 2027).
The company is collaborating with municipalities in Hokkaido to develop a local energy production and consumption model utilizing renewable energy. It has newly recorded a provision for repairs related to periodic inspection and dredging work at the Ishikari Power Plant (a profit impact of ¥113 million), and continues to invest to maintain stable operation of power generation facilities.
Increased strategic expenses related to smart meters and DX have already been factored into the FY2027 (ending March 2027) forecast. The IT Solutions business has been strengthened through the consolidation of Hokugas Lifefront Co., Ltd. as a subsidiary. Other segment sales increased 28.3% year on year to ¥4,271 million, and segment profit surged 215.3% year on year to ¥464 million, with some results of DX investment already becoming evident.
From FY2026 (ending March 2026), Hokugas Lifefront Co., Ltd. (from the start of the fiscal year) and Muroran Gas Co., Ltd. (from mid-fiscal year) were newly added to the scope of consolidation. In connection with the consolidation of Muroran Gas Co., Ltd. as a subsidiary, a gain on negative goodwill of ¥479 million was recorded as extraordinary income. This has contributed to the expansion of the supply area, customer base, and business portfolio, and is expected to boost the group's overall earning power.
Last updated: July 19, 2026