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Overall Financial Performance

• This is the second year of the new management体制 led by President Nakagomi. The company achieved its first ever first half (interim) net profitability, after years of first half net losses that shrank sequentially in 2024 and 2025 fiscal years.
• Consolidated revenue was 120.4 billion yen, a 3.1 billion yen decrease YoY, driven by lower sales volumes of petroleum and gasoline. Gross profit improved 0.1 billion yen YoY to 17.0 billion yen, indicating modest improvement in profitability.
• Selling, general and administrative expenses decreased 0.3 billion yen YoY to 16.3 billion yen, showing progress in cost efficiency. Operating profit increased 0.45 billion yen YoY to 0.69 billion yen. Ordinary profit tripled YoY to 1.04 billion yen, and interim net profit increased 0.27 billion yen YoY to 0.43 billion yen.
• Q1 ordinary profit was 0.98 billion yen, Q2 ordinary profit was 0.058 billion yen, with both periods exceeding prior year levels. The company has historically had revenue heavily concentrated in the second half, so the first half profitability marks a key structural improvement.

Cash Flow and Balance Sheet

• Operating cash flow was 3.09 billion yen, a 0.09 billion yen decrease YoY: increased pre-tax profit was offset by an 1.1 billion yen increase in bonus payments related to higher bonus reserves.
• Investing cash flow was a 0.75 billion yen outflow, an 0.88 billion yen decrease in outflows YoY, due to the absence of the prior year's new headquarters building acquisition and additional income from fixed asset sales.
• Financing cash flow was a 3.31 billion yen outflow, a 4.93 billion yen decrease in outflows YoY, due to a smaller contraction in working capital borrowings from commercial banks compared to the prior year.
• Ending cash and cash equivalents balance was 10.7 billion yen, a 5.89 billion yen increase YoY.
• Total assets were 87.7 billion yen, down from 105.9 billion yen at the prior fiscal year end, due to seasonal contraction of trade receivables and trade payables in the slow first half period; management expects the balance sheet to expand back to ~100 billion yen by full year end as the second half busy season progresses.

Mid-Term Growth Strategy Updates

• The company's growth strategy is built on two core pillars: 1) reorganization of domestic business infrastructure, and 2) strengthened retail service strategy.
  • Reorganization of domestic business infrastructure: The planned integration of four core subsidiaries in April 2026 is progressing on schedule. Multiple cross-functional task forces are handling coordination and preparation, with early realization of post-merger synergies as a key priority.
  • Strengthened retail service strategy: The company is transforming from an energy-focused company to a regional service provider, aiming to build lifetime customer loyalty with a user-first, quality-focused approach. Four priority initiatives are underway:
    1. Service Expansion: Combine comprehensive energy offerings with group-held home services including housing maintenance and energy efficiency consulting, plus continued development of new DX and community-focused services.
    2. Customer Expansion: Pursue cross-selling and new customer acquisition across individual consumers, regional corporates, local governments, and community groups.
    3. Brand Enhancement: Increase regional brand recognition and build awareness of the company's high service quality and content.
    4. Competitiveness Enhancement: Advance internal operational efficiency to free up capacity for new initiatives and support improved service quality.

CSR Activities

• The company launched forest regeneration support projects in Nagano and Tochigi Prefectures under the "Afan Shinanen Akari no Mori" initiative to cultivate natural capital.
• Group subsidiary Miraif has conducted donations for disaster prevention facility improvement projects via the corporate version of the hometown tax donation program, as disaster preparedness is a strategically aligned priority for the company.

• The full year 2026 March fiscal year ordinary profit target of 4.9 billion yen is unchanged from the initial guidance announced at the start of the fiscal year.
• As of the interim period, the company has achieved ~20% of the full year profit target, and management noted there is still significant work to reach the full year goal. The company will continue steady execution to meet the full year plan, as the second half is the traditional busy season and revenue has already started to accumulate as expected.
• Capital investment is tracking slightly behind the full year plan as of the interim period, but management will continue to pursue and advance high-quality investment opportunities opportunistically through the second half.
• Any excess cash after planned investments will be considered for flexible deployment, including additional shareholder return measures.

• BtoC Business: 27.0 billion yen in revenue, a 0.6 billion yen decrease year-over-year (YoY). Driven by lower unit consumption due to rising summer temperatures. It contributed 22.4% of total consolidated revenue.
• BtoB Business: 82.3 billion yen in revenue, a 3.0 billion yen decrease YoY. The decline is due to lower spot transactions in industrial gas sales. It contributed 68.4% of total consolidated revenue.
• Non-Energy Business: 10.9 billion yen in revenue, a 0.5 billion yen increase YoY. Growth is supported by strong performance from integrated building maintenance, shared bicycle, and system solutions segments. It contributed 9.1% of total consolidated revenue.

Profit performance by segment: BtoC delivered a 0.19 billion yen profit increase YoY from cost review and profitability improvements. Non-Energy delivered a 0.3 billion yen profit increase YoY from improved profitability across its core sub-segments. BtoB recorded a 0.14 billion yen profit decrease YoY due to the loss of large spot orders received in the prior year period.

• The planned integration of four core subsidiaries requires early realization of merger synergies to improve profitability, which remains a key outstanding challenge.
• Capital investment execution is currently slightly behind the original annual plan as of the interim period, requiring accelerated progress through the second half.
• Full year profit achievement remains dependent on second half performance, as the interim period only delivered ~20% of the full year target, and demand and market conditions could shift through the remainder of the fiscal year.

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