[Company analysis] Tokyo Gas Co., Ltd. (東京ガス)

「Tokyo Gas Co., Ltd. (東京ガス)」is a Japanese major gas supplier for Tokyo and its neighboring area. It is one of the largest Japanese city gas companies(「Tokyo Gas Co., Ltd. (東京ガス)」,「Osaka Gas Co., Ltd.(大阪ガス)」,「Toho Gas Co., Ltd.(東邦ガス)」and「Saibugas Co., Ltd.(西部ガス)」). It owns gas conduit of about 60,000 km, which is the largest in Japan and the largest in the world. They also carry out a series of businesses about city gas from procurement and transportation of raw materials to manufacturing and supply. The number of consolidated employees is approximately 16,708.

 

1. Company Profile

2. Summary and Features

3. Major Business

4. Financial Information

 

 

 

1. Company Profile

 

※Unit is JPY million, as of 2019

Company name	Tokyo Gas Co., Ltd.
Company name (Japanese)	東京ガス
Date of establishment	October 1, 1885
Headquarters location	〒105-8527 東京都港区海岸一丁目5番20号
Capital	141,800
Consolidated sales	1,962,308
Consolidated operating profit	93,704
Consolidated total assets	2,428,149
Consolidated capital	1,171,345
Capital adequacy ratio	48.2%
Consolidated number of employees	16,708

 

 

 

2. Summary and Features

 
Currently, Japanese city gas companies such as「Tokyo Gas」and「Osaka Gas」are legally allowed to have local monopolies. This is a national policy for the stable supply of energy, and it is to prevent the problem of energy supply due to competition between companies. Under this policy,「Tokyo Gas」also aims to provide a stable energy supply, and more than 90% of total sales are generated in the gas related business.

 

Although it is said that「Tokyo Gas」is a little inferior to「Osaka Gas」, but still they are also implementing business diversification apart from gas business, by utilizing abundant financial resources secured in the gas business. Most  of all, in response to the trend of energy liberalization, they established a power wholesale subsidiary,「Nijio Co., Ltd.,(ニジオ)」 and are making a foray into the power market. This company also carries out real estate business such as office building and condominium development.

 

The greatest strength of「Tokyo Gas」is, its stable business foundation. The gas business itself is based on supplying gas by laying pipelines in areas in general homes and factories. So, large-scale demand can be secured very easily and stably. In particular,「Tokyo Gas」has a very large sales volume because it supplies gas to the metropolitan area where the population is dense.

 

Moreover, by utilizing aftershock caused by "Aftermath of the 2011 Tōhoku earthquake and tsunami" as their advantages,「Tokyo Gas」expanded its business rapidly. However, with the liberalization of gas, they are working on overseas natural gas infrastructure development projects. Considering the future decrease in gas demand in Japan domestic level, this company is trying to secure more stable business base.

 

 

 

3. Major Business

 

■ Gas business
Manufactures, supplies and sells city gas and LNG gas.

■ Electricity business

■ Overseas business
They are developing gas upstream / midstream / downstream businesses overseas.

■ Energy related
They carry out engineering solutions business, gas appliances, gas construction, construction, etc.

■ Real estate business
They carry out land and building leasing and management business.

 

 

4. Financial information

 

※Unit is JPY million

		2016	2017	2018
Consolidated sales		1,587,085	1,777,344	1,962,308
Consolidated operating profit		58,365	116,302	93,704
Consolidated total assets		2,230,269	2,334,721	2,428,149
Consolidated net assets		1,112,807	1,148,433	1,171,345
Breakdown of sales	City gas business	1,001,797	1,103,272	1,302,131
	Electricity business	145,710	217,590	280,178
	Overseas business	31,876	33,813	38,845
	Energy related business	367,200	382,948	308,679
	Real estate business	19,752	20,149	21,880
	Others	20,748	19,569	10,591