Japan utilities sector: Points to watch in Apr–Jun 2026 results

Research evidence excerpt

Japan utilities sector: Points to watch in Apr–Jun 2026 results

Japan utilities sector: Points to watch in Apr–Jun Global Markets Research

2026 results 8 July 2026

EQUITY: JAPAN UTILITIES

Research AnalystsWe estimate profits down on sharp rise in resource prices

Japan utilities & oil

We estimate LNG procurement gains at city gas companies Shinichi Yamazaki - NSC

shinichi.yamazaki.a3@nomura.com

Business climate in Apr–Jun: Sliding time-lag losses from rise in resource prices +81 3 6703 1133

We estimate that profits were down y-y at many companies in the utilities sector in Apr–

Jun 2026. We estimate that profits were down at many major electric power companies

because of sliding time-lag losses under the fuel cost adjustment scheme. However,

because demand for electricity is typically low in Apr–Jun and there tends to be timing

differences for expense recognition, some companies could post profit increases due to

these timing effects. As per the case with major electric power companies, we think that

profits at city gas companies were likely pushed down by sliding time-lag losses under the

resource cost adjustment scheme. However, profits may have risen owing to timing

differences for cost recognition and increased JLC gains* as a result of higher LNG spot

prices. Temperatures were up y-y in April and May and down y-y in June, so it looks like

there was likely a decline in heating demand in April and a decline in air-conditioning

demand in June.

*ThedifferencebetweentheJapanLiquefiedNaturalGasCocktail(JLC)priceand

companies'LNGimportprices

Points to watch in Apr–Jun results

In the past, many companies in the utilities sector have tended not to revise their guidance

when announcing Q1 results. If the historical pattern holds, this would mean that it is