OREANDA-NEWS. Tokyo Gas Announces Consolidated Financial Results Bulletin for the 3rd Quarter Ended December 31, 2013.

Gas sales volume for the first nine months of FY2013 (April 1 - December 31, 2013) declined 6.4% year on year, to 10,130 million m3. This included a reduction in residential demand from lower demand for air conditioning and water heating because of higher temperatures than in the year-earlier period, and a decline in industrial demand from the shift of a portion of gas used for electric power generation to tolling agreement. Despite the decrease in gas sales volume, sales unit prices under the gas rate adjustment system rose, offsetting the yen's depreciation, which resulted in a 4.8% increase in city gas sales to JPN 1,014.8 billion.

In addition to this increase in city gas sales, sales of other energy (LNG sales, etc.) rose, leading to a 7.5% increase in consolidated net sales, to JPN 1,435.3 billion.

Despite efforts to further increase management efficiency and reduce expenses to the maximum extent possible, higher gas resource costs stemming from the yen's depreciation, combined with an increase in expenses at the other energy segment, resulted in a 9.0% increase in operating expenses, to JPN 1,347.4 billion.

As a result, operating income declined 11.3% year on year, to JPN 87.8 billion, and ordinary income declined 18.3% to, JPN 83.1 billion. After recording extraordinary income of JPN 0.6 billion from gain on sales of noncurrent assets, an impairment lossof JPN 2.1 billion under extraordinary losses, and income taxes,net income for the period declined 13.8% year on year, to JPN 55.1 billion.

Because the city gas business accounts for the majority of consolidated net sales, seasonal fluctuations at the business from factors including average temperatures may have a significant impact on net sales.

Based on recent market trends, we have revised the foreign exchange rate in the economic framework assumptions used in the forecast for consolidated business results included in the Consolidated Financial Results Bulletin for the 2nd Quarter Ended September 30, 2013, announced on October 30, 2013, to JPN 105.00/USD for the fourth quarter of FY2013. Our crude oil price assumption is unchanged (USD 110.00/bbl).According to these assumptions, foreign exchange rate for FY2013 is estimated to be JPN 100.77/USD and crude oil price for FY2013 is estimated to be USD 109.58/bbl.

As a result, we have raised our previous forecast for consolidated net sales at Tokyo Gas and its subsidiaries by JPN 6.0 billion, to JPN 2,086.0 billion, but have lowered our profit forecasts by JPN 9.0 billion, to JPN 150.0 billion for operating income, by JPN 10.0 billion, to JPN 143.0 billion, for ordinary income, and by JPN 6.0billion, to JPN 97.0 billion, for net income.

On a non-consolidated basis, we have revised our forecasts for non-consolidated business results included in the Consolidated Financial Results Bulletin for the 2ndQuarter Ended September 30, 2013, announced on October 30, 2013. We have raised our net sales forecast by JPN 17.0 billion, to JPN 1,888.0 billion, on a higher estimate for gas sales volume to reflect increases in demand from industrial customers, including electric power generation, and from residential customers due to the effect of recent low temperature trends. On the other hand, with the yen's depreciation increasing resource costs, we see the gas gross margin decreasing and have therefore lowered our profit forecasts: by JPN 7.0 billion, to JPN 115.0 billion for operating income, by JPN 7.0 billion, to JPN 115.0 billion for ordinary income, and by JPN 5.0billion, to JPN 79.0 billion for net income.