Tokyo Gas, Japan’s biggest city gas provider, on Wednesday posted 17.2 billion yen ($112 million) in first-half net profit to end-September, down 84% from the same period a year earlier, hit by lower gas prices at home and North America.

But the utility announced a fresh plan to buy back up to 40 billion yen of its own shares, in addition to an already-planned 40 billion yen buyback.

“We decided on the additional buyback to enhance capital efficiency, as our healthy earnings in recent years have led to an increase in retained earnings,” CFO Taku Minami told a news conference.

“The total return ratio, including dividends, is expected to reach 64% this financial year,” he said, adding that the company will continue to consider various measures to achieve its goal to achieve a return on equity (ROE) of around 8% in the next fiscal year.

The drop in first-half profit was due to smaller gains from its mainstay city gas operation due to lower gas prices and higher fuel costs amid the yen’s depreciation, Minami said.

In addition, contribution from overseas business fell as it has divested upstream gas assets in Australia and lower U.S. natural gas prices dented earnings there.

The Japanese company paid $2.7 billion to acquire Texas-based natural gas producer Rockcliff Energy late last year and purchased 49% stake in an energy marketing and trading firm in North America, ARM Energy Trading, this year.

The company kept its net profit forecast for the fiscal year to end-March 2025 at 81 billion yen.
Source: Reuters (Reporting by Yuka Obayashi and Katya Golubkova; Editing by Tom Hogue and David Evans)