Iwatani Q1 FY2027: Net profit surges 569% on LPG price hike, equity gains

Iwatani released its fiscal 2027 first-quarter results on August 6, 2026, delivering sharp profit increases across the board. Revenue reached ¥233.36 billion (up 13.1% year on year), operating profit came to ¥13.41 billion (up 109.0%), ordinary profit soared to ¥34.30 billion (up 361.3%), and net income attributable to owners of the parent hit ¥31.72 billion (up 569.6%). All profit lines from gross profit down set new first-quarter records.

The gains were fueled by a ¥4.7 billion year-on-year boost from higher LPG import prices, improved profitability in helium and other specialty gases, and a surge in equity-method income from Cosmo Energy Holdings to ¥18.2 billion (compared with a loss of ¥0.5 billion a year earlier). Stripping out these one-off factors, underlying operating profit rose 29.1% to ¥9.8 billion.

Operating conditions were supportive: corporate earnings remained firm on AI and semiconductor demand, consumer spending held up, and geopolitical tensions in the Middle East kept fuel and raw material prices elevated. Iwatani is accelerating its social-solution and sustainable-growth initiatives under its medium-term management plan, PLAN 27, with strategic areas such as hydrogen, helium, and rare earths beginning to contribute.

The Comprehensive Energy and Industrial Gases & Machinery segments drove the profit surge, while Materials posted a decline.

Comprehensive Energy
Revenue rose 9.1% to ¥99.81 billion, and operating profit jumped 271.8% to ¥7.67 billion. Higher LPG import prices immediately fed through to improved wholesale margins, accounting for the ¥4.7 billion market-related gain. However, retail LPG volumes fell 3.5% year on year, and cassette stove/cylinder sales weakened, particularly in China.

Industrial Gases & Machinery
Revenue grew 11.3% to ¥69.02 billion, and operating profit surged 129.8% to ¥4.84 billion. Air-separation gas volumes rose, mainly for the electronics industry, while hydrogen shipments for space and decarbonization remained solid. Helium profitability improved with market prices, and specialty gases for semiconductors were strong. On the machinery side, sales of ammonia supply equipment grew, reflecting the decarbonization trend.

Materials
Revenue was up 21.9% to ¥62.83 billion, the fastest growth among segments, but operating profit fell 23.1% to ¥2.30 billion. Sales of resin raw materials and products, secondary battery materials, and rare earths increased, but the mineral sands operation in Australia struggled to achieve stable production, undermining profitability. Lower stainless steel sales volumes also weighed on earnings.

Other
Revenue was ¥1.70 billion (up 28.0%), operating profit ¥0.43 billion (down 6.3%).

Table data for the four segments is summarized below.

Total assets at quarter-end stood at ¥927.3 billion, up ¥27.5 billion from the previous fiscal year-end. Investment securities increased ¥31.4 billion, and tangible fixed assets rose ¥8.6 billion, while notes and accounts receivable (including contract assets) decreased ¥17.5 billion, indicating improved asset efficiency. Liabilities fell ¥11.4 billion to ¥439.3 billion, as repayments of short- and long-term borrowings pushed interest-bearing debt down ¥6.7 billion to ¥240.5 billion. The equity ratio climbed to 51.3% (from 48.6%), and the D/E ratio improved to 0.50x (from 0.56x).

The full-year dividend forecast is unchanged at ¥47 per share (interim ¥23.5, year-end ¥23.5). Depreciation and amortization totaled ¥7.9 billion (up 9.2% year on year), and the full-year capital expenditure plan stands at ¥70.0 billion, with priority allocations to Industrial Gases & Machinery (¥31.0 billion) and Comprehensive Energy (¥19.0 billion).

Iwatani left its FY2027 consolidated forecasts unchanged from the May 14, 2026 announcement. The company projects revenue of ¥960.0 billion (up 5.7% year on year), operating profit of ¥48.8 billion (up 27.4%), ordinary profit of ¥59.0 billion (up 6.8%), and net profit of ¥45.5 billion (down 4.5%). Progress after the first quarter reached 24.3% for revenue, 27.5% for operating profit, and a striking 69.7% for net profit. The high net profit attainment reflects the equity-method income from Cosmo Energy Holdings, which at ¥18.2 billion in Q1 already far exceeds the full-year assumption of ¥8.8 billion. Management remains cautious, however, as the LPG market gains are temporary and a second-half pullback is possible.

Key risks facing Iwatani include:

• LPG import price volatility: Market-sensitive profit structure; falling prices could quickly reverse gains.
• Overseas earnings uncertainty: Delays in stable operation at the Australian mineral sands mine and falling cassette stove sales in China highlight external vulnerabilities.
• Geopolitical risk: Middle East tensions and resource nationalism may affect procurement of LPG and rare earths.
• Energy transition: Accelerating decarbonization raises medium- to long-term questions about the fossil-fuel-related business portfolio.
• Equity-method investee performance: Profit can swing widely depending on results at Cosmo Energy Holdings and other associates.

Iwatani is pushing forward with hydrogen-related initiatives this fiscal year. It began Japan’s first demonstration of using the cold energy from liquefied hydrogen for building air conditioning, in partnership with Obayashi Corp., with an eye on industrial applications. The company also joined the “Hydrogen 1% Procurement Declaration” to prepare for growing hydrogen demand. Overseas, it set up a U.S. joint venture with New Cosmos Electric for residential gas alarms, capitalizing on mandated installation requirements. Additionally, Iwatani participated in a French presidential investment summit and, in collaboration with JOGMEC, moved to strengthen the rare-earth refining supply chain through loans and investments. These moves are aligned with PLAN 27’s goals of solving social issues and achieving sustainable growth, expanding non-energy fields and diversifying earnings sources.