Iwatani: Overview of Business Results for 1Q FY25

Consolidated Financial Results

for the Three Months Ended June 30, 2025 [Japanese GAAP]

August 8, 2025

Company name: IWATANI CORPORATION Stock exchange listing: Tokyo

Code number: 8088

URL: https://www.iwatani.co.jp/ Representative: Hiroshi Majima President

Contact: Tetsuo Matsuo General Manager Accounting Dept. Phone: 06-7637-3325

Scheduled date of commencing dividend payments: -

Availability of supplementary briefing material on financial results: Yes Schedule of financial results briefing session: Yes

(Amounts of less than one million yen are rounded down)

1. Consolidated Financial Results for the Three Months Ended June 30, 2025 (April 1, 2025 to June 30, 2025)

   1. Consolidated Operating Results (% indicates changes from the previous corresponding period.)

      	Net sales		Operating profit		Ordinary profit		Profit attributable to owners of parent
      Three months ended	Million yen	%	Million yen	%	Million yen	%	Million yen	%
      June 30, 2025	206,353	4.5	6,420	(23.7)	7,439	(45.2)	4,724	(53.4)
      June 30, 2024	197,519	(2.2)	8,419	(1.1)	13,576	27.9	10,139	41.4

      (Note) Comprehensive income: Three months ended June 30, 2025: ¥ 2,885 million[(82.0)%]

      Three months ended June 30, 2024: ¥ 16,071 million[ 4.1 %]

      	Basic earnings per share	Diluted earnings per share
      Three months ended	Yen	Yen
      June 30, 2025	20.53	-
      June 30, 2024	44.06	-

      (Notes) 1 The Company finalized the provisional accounting treatment for the application of equity method in the fiscal year ended March 31, 2025. As a result, figures for the three months ended June 30, 2024 reflect the finalization of the provisional accounting treatment.

      2 The Company carried out a 4-for-1 share split of its common share as of October 1, 2024.

      Basic earnings per share has been calculated as if this share split were carried out at the beginning of the previous fiscal year.

   2. Consolidated Financial Position

      	Total assets	Net assets	Capital adequacy ratio
      As of	Million yen	Million yen	%
      June 30, 2025	844,962	388,983	44.7
      March 31, 2025	872,194	397,191	44.3

      (Reference) Equity: As of June 30, 2025: ¥ 377,724 million

      As of March 31, 2025: ¥ 386,036 million

2. Dividends

   	Annual dividends
   	1st quarter-end	2nd quarter-end	3rd quarter-end	Year-end	Total
   	Yen	Yen	Yen	Yen	Yen
   Fiscal year ended March 31, 2025	-	-	-	47.00	47.00
   Fiscal year ending March 31, 2026	-
   Fiscal year ending March 31, 2026 (Forecast)		23.50	-	23.50	47.00

   (Note) Revision to the forecast for dividends announced most recently: No

3. Consolidated Financial Results Forecast for the Fiscal Year Ending March 31, 2026(April 1, 2025 to March 31, 2026)

(% indicates changes from the previous corresponding period.)

(Note) Revision to the financial results forecast announced most recently: No

* Notes:

1. Significant changes in the scope of consolidation during the period: Yes New 2 Companies

   Exclusion: 6 Companies

2. Accounting policies adopted specially for the preparation of quarterly consolidated financial statements: No

3. Changes in accounting policies, changes in accounting estimates and retrospective restatement

   1. Changes in accounting policies due to the revision of accounting standards: No

   2. Changes in accounting policies other than 1) above: No

   3. Changes in accounting estimates: No

   4. Retrospective restatement: No

4. Total number of issued shares (common shares)

   1. Total number of issued shares at the end of the period (including treasury shares): June 30, 2025: 234,246,596 shares

      March 31, 2025: 234,246,596 shares

   2. Number of treasury shares at the end of the period:

      June 30, 2025: 4,108,735 shares

      March 31, 2025: 4,107,871 shares

   3. Average number of shares outstanding during the period:

Three months ended June 30, 2025: 230,138,154 shares

Three months ended June 30, 2024: 230,111,243 shares

(Note) The Company carried out a 4-for-1 share split of its common share as of October 1, 2024.

Average number of shares outstanding during the period has been calculated as if this share split were carried out at the beginning of the previous fiscal year.

*1. Review of the Japanese-language originals of the attached consolidated quarterly financial statements by certified public accountants or an audit firm: Yes (voluntary)

*2. Cautionary Statement with Respect to Forward-Looking Statements, and Other Information (Caution regarding forward-looking statements)

The forward-looking statements, such as results forecasts, included in this document are based on information currently available to the Company and assumptions considered reasonable, and do not purport to be a promise by the Company to achieve such results. Actual results may differ materially, depending on a range of factors. For the assumptions prerequisite to the results forecasts and the points to be noted in the use of the results forecasts, please see "Overview of Operating Results, Etc. (4) Consolidated Financial Results Forecasts" on page 3.

(How to obtain supplementary briefing material on financial results)

The briefing material on financial results is scheduled to be posted on the company's website.

Overview of Operating Results, Etc. 2

1. Overview of Operating Results for the Three Months Ended June 30, 2025 2

2. Segment Information 2

3. Overview of Financial Position for the Three Months Ended June 30, 2025 3

4. Consolidated Financial Results Forecasts 3

Quarterly Consolidated Financial Statements and Notes 4

1. Quarterly Consolidated Balance Sheets 4

2. Quarterly Consolidated Statements of Income and Comprehensive Income 6

3. Explanatory Notes to Quarterly Consolidated Financial Statements 8

(Notes to Segment Information, Etc.) 8

(Notes in the Event of Significant Changes in Shareholders' Equity) 8

(Notes on the Assumption of a Going Concern) 8

(Notes to Quarterly Consolidated Statements of Cash Flows) 9

(Notes to Significant Subsequent Events) 9

Additional Information 10

Results for 1Q FY2025 10

1. Consolidated Statements of Income 10

2. Operating Profit Except for Impact of LPG Import Price Fluctuation 10

3. LPG Import Price (CP) 10

4. Segment Information 10

5. LPG and Industrial Gases Net Sales -Sales Volume 11

6. Financial Position 11

7. Capital Expenditure 11

8. Amount of share of profit or loss of Cosmo accounted for using equity method 11

9. Non-consolidated 11

Overview of Operating Results, Etc.

1. Overview of Operating Results for the Three Months Ended June 30, 2025

   1. Economic Environment and Initiatives

      During the cumulative first quarter of the current fiscal year, the Japanese economy continued on a gradual trend of recovery, supported by a pick-up in personal consumption due to an improvement in the income environment and an increase in capital investment against the backdrop of solid corporate earnings, despite the uncertainty about the outlook due to factors such as the U.S. tariff policy.

      Under these circumstances, Iwatani (hereinafter referred to as the "Company") expanded its business to achieve its basic policies of "solutions to social issues" and "sustained growth" in accordance with its medium-term management plan, "PLAN27," which ends in the fiscal year ending March 31, 2028.

      In order to realize a hydrogen energy-based society, the Company has applied for multiple projects for price gap support and hub development support under the Hydrogen Society Promotion Act, and is preparing the groundwork for business development with the aim of building a CO2-free hydrogen supply chains.

      With regard to our carbon-free strategies, in addition to the Company's participation in efforts promoted by Cosmo Energy Holdings Co., Ltd. and other entities to build a national supply chain for Sustainable Aviation Fuel (SAF) that utilizes used cooking oil as the raw material, it has begun considerations on the manufacture of green LPG which is produced during the manufacturing process of SAF with the aim of LPG decarbonization. Furthermore, the Company started supplying wood pellets to the Tahara Biomass Power Plant, an eight-company joint investment in which the Company is an investing party. The Company is playing a role in ensuring a stable supply and contributing to the decarbonization of electricity.

      In our domestic energy & service strategies, we concluded a comprehensive partnership agreement with the city of Oda in Shimane Prefecture with the aim of providing a wide-range of services, such as monitoring children and the elderly, that utilizes LPG business infrastructure.

      As part of its overseas strategies, the Company has acquired all shares in Bangkok Sanyo Spring Co., Ltd., which is based in Thailand, which performs metal press processing for automotive and precision parts. By leveraging the processing technology of Bangkok Sanyo Spring Co., Ltd. and our sales network, the Company aims to further expand the sales of processed metal products, from this base in Thailand.

   2. Earnings

   As a result of the negative impact of LPG import price fluctuations, the weakening of the helium market, and a decrease in share of profit of entities accounted for using equity method, for the cumulative first quarter of the current fiscal year, net sales were 206.353 billion yen (+8.834 billion yen year-on-year), operating profit was 6.420 billion yen (-1.998 billion yen year-on-year), ordinary profit was 7.439 billion yen (-6.136 billion yen year-on-year), and profit attributable to owners of parent was 4.724 billion yen (-5.415 billion yen year-on-year).

2. Segment Information Integrated Energy

   In the Integrated Energy Business, revenue increased due to steady sales of energy-related equipment and the impact of new consolidation. As for profits, LPG sales volume decreased in the wholesale sector and there was a negative impact of LPG import price fluctuations (-1.105 billion yen year-on-year), profitability declined.

   As a result, net sales in this segment were 85.452 billion yen (+2.884 billion yen year-on-year), and operating profit was 1.886 billion yen (-1.381 billion yen year-on-year).

   Industrial Gases & Machinery

   In the Industrial Gases & Machinery Business, sales volume of air separation gases remained strong mainly for the optical fiber industries. In the hydrogen business, sales of hydrogen and hydrogen-refueling station related equipment increased. The profitability of specialty gases declined due to the weakening of helium markets. In the gas-related equipment, shipments of automobile-related equipment and semiconductor-related equipment decreased.

   As a result, net sales in this segment were 62.033 billion yen (+1.661 billion yen year-on-year) and operating profit was 2.107 billion yen (-1.179 billion yen year-on-year).

   Materials

   In the Materials Business, sales of high-performance film materials, mainly for smartphones, were sluggish, and regarding mineral sands business, the profitability of our mining sites in Australia declined. On the other hand, regarding rare earths and other items affected by China's export restrictions, efforts to ensure a stable supply resulted in increased sales. In addition, sales of biomass fuels and consumer resin products were solid, and sales of stainless steel increased due to the impact of new consolidation.

   As a result, net sales in this segment were 51.517 billion yen (+4.200 billion yen year-on-year) and operating profit was 2.991 billion yen (+0.462 billion yen year-on-year).

   Others

   Net sales were 7.350 billion yen (+0.087 billion yen year-on-year), and operating profit was 0.644 billion yen (-0.143 billion yen year-on-year).

3. Overview of Financial Position for the Three Months Ended June 30, 2025
   1. Total Assets

      Total assets at the end of the first quarter of the current fiscal year decreased by 27.231 billion yen from the end of the previous fiscal year to 844.962 billion yen. This was mainly due to decreases of 34.804 billion yen in notes and accounts receivable - trade, and contract assets and 3.969 billion yen in investment securities, respectively, despite increases of 6.560 billion yen in property, plant and equipment and 2.053 billion yen in other under current assets including advance payments to suppliers, respectively.

   2. Total Liabilities

      Total liabilities at the end of the first quarter of the current fiscal year decreased by 19.023 billion yen from the end of the previous fiscal year to 455.979 billion yen. This was mainly due to decreases of 19.766 billion yen in notes and accounts payable - trade, 8.365 billion yen in income taxes payable, respectively, despite an increase of 7.500 billion yen in contract liabilities.

      Interest-bearing debt, including lease liabilities, etc., at the end of the first quarter of the current fiscal year increased by 2.800 billion yen to 267.248 billion yen from the end of the previous fiscal year.

   3. Total Net Assets

   Total assets at the end of the first quarter of the current fiscal year decreased by 8.208 billion yen from the end of the previous fiscal year to 388.983 billion yen. This was mainly due to decreases of 6.102 billion yen in retained earnings, 3.585 billion yen in foreign currency translation adjustment, respectively, despite an increase in 1.766 billion yen in valuation difference on available-for-sale securities.

4. Consolidated Financial Results Forecasts

Although economic trends, fluctuations in LPG import prices, and other factors may affect our business performance, we have not changed our consolidated earnings forecast announced on May 14, 2025, for the first quarter of the current fiscal year.

Quarterly Consolidated Financial Statements and Notes

1. Quarterly Consolidated Balance Sheets

   (Million yen)

   As of March 31, 2025 As of June 30, 2025

   Assets

   Current assets
   Cash and deposits	27,759	29,938
   Notes and accounts receivable - trade, and contract assets	162,256	127,451
   Electronically recorded monetary claims - operating	26,368	25,647
   Merchandise and finished goods	65,786	66,840
   Work in process	7,375	8,994
   Raw materials and supplies	11,391	11,048
   Other	27,733	29,787
   Allowance for doubtful accounts	(212)	(203)
   Total current assets	328,458	299,505
   Non-current assets
   Property, plant and equipment
   Land	79,287	81,929
   Other, net	160,918	164,837
   Total property, plant and equipment	240,206	246,766
   Intangible assets
   Goodwill	22,893	22,641
   Other	24,862	25,809
   Total intangible assets	47,756	48,451
   Investments and other assets
   Investment securities	211,938	207,968
   Other	44,380	42,820
   Allowance for doubtful accounts	(545)	(550)
   Total investments and other assets	255,772	250,238
   Total non-current assets	543,735	545,457
   Total assets	872,194	844,962

   (Million yen)

   As of March 31, 2025 As of June 30, 2025

   Liabilities

   Current liabilities

   Notes and accounts payable - trade	76,102	56,336
   Electronically recorded obligations - operating	34,367	32,576
   Short-term borrowings	24,421	27,630
   Income taxes payable	10,882	2,517
   Contract liabilities	8,330	15,831
   Provision for bonuses	7,194	4,682
   Other	93,695	98,227
   Total current liabilities	254,993	237,801
   Non-current liabilities
   Bonds payable	70,000	70,000
   Long-term borrowings	111,619	109,607
   Provision for retirement benefits for directors (and other officers)	1,522	1,414
   Retirement benefit liability	6,082	6,160
   Other	30,783	30,994
   Total non-current liabilities	220,008	218,177
   Total liabilities	475,002	455,979
   Net assets
   Shareholders' equity
   Share capital	35,096	35,096
   Capital surplus	32,128	32,127
   Retained earnings	274,892	268,790
   Treasury shares	(1,558)	(1,559)
   Total shareholders' equity	340,559	334,454
   Accumulated other comprehensive income
   Valuation difference on available-for-sale securities	29,334	31,100
   Deferred gains or losses on hedges	2,270	2,275
   Foreign currency translation adjustment	11,839	8,254
   Remeasurements of defined benefit plans	2,031	1,639
   Total accumulated other comprehensive income	45,476	43,269
   Non-controlling interests	11,155	11,258
   Total net assets	397,191	388,983
   Total liabilities and net assets	872,194	844,962

2. Quarterly Consolidated Statements of Income and Comprehensive Income

   Quarterly Consolidated Statements of Income (For the three months)

   Three months ended June 30, 2024

   (Million yen) Three months ended

   June 30, 2025

   Net sales	197,519	206,353
   Cost of sales	143,861	151,787
   Gross profit	53,657	54,566
   Selling, general and administrative expenses
   Transportation costs	7,666	7,856
   Provision of allowance for doubtful accounts	(3)	(4)
   Salaries, allowances and bonuses	11,142	11,574
   Provision for bonuses	3,002	3,233
   Retirement benefit expenses	499	438
   Provision for retirement benefits for directors (and other officers)	41	24
   Other	22,889	25,022
   Total selling, general and administrative expenses	45,238	48,145
   Operating profit	8,419	6,420
   Non-operating income
   Interest income	111	84
   Dividend income	772	819
   Foreign exchange gains	-	46
   Share of profit of entities accounted for using equity method	3,821	-
   Subsidy income	471	438
   Other	854	812
   Total non-operating income	6,031	2,201
   Non-operating expenses
   Interest expenses	607	753
   Foreign exchange losses	121	-
   Share of loss of entities accounted for using equity method	-	72
   Other	145	356
   Total non-operating expenses	874	1,182
   Ordinary profit	13,576	7,439
   Extraordinary income
   Gain on sale of non-current assets	183	306
   Gain on sale of investment securities	1,580	50
   Subsidy income	2	52
   Gain on liquidation of project	-	332
   Total extraordinary income	1,767	742
   Extraordinary losses
   Loss on sale of non-current assets	10	14
   Loss on retirement of non-current assets	88	285
   Loss on sale of investment securities	1	0
   Loss on tax purpose reduction entry of non-current assets	2	52
   Total extraordinary losses	103	352
   Profit before income taxes	15,240	7,830
   Income taxes	4,804	2,679
   Profit	10,435	5,151
   Profit attributable to non-controlling interests	296	426
   Profit attributable to owners of parent	10,139	4,724

   Quarterly Consolidated Statements of Comprehensive Income (For the three months)

   Three months ended

   June 30, 2024

   (Million yen)

   Three months ended

   June 30, 2025

   Profit	10,435	5,151
   Other comprehensive income
   Valuation difference on available-for-sale securities	2,636	1,587
   Deferred gains or losses on hedges	362	(125)
   Foreign currency translation adjustment	2,090	(3,444)
   Remeasurements of defined benefit plans, net of tax	21	(390)
   Share of other comprehensive income of entities accounted for using equity method	525	107
   Total other comprehensive income	5,635	(2,265)
   Comprehensive income	16,071	2,885
   Comprehensive income attributable to
   Comprehensive income attributable to owners of parent	15,722	2,518
   Comprehensive income attributable to non-controlling interests	349	367

3. Explanatory Notes to Quarterly Consolidated Financial Statements

(Notes to Segment Information, Etc.)

1. First Quarter of FY2024 (April 1, 2024 - June 30, 2024)

   1. Information related to sales, operating income (loss) by reportable segment

      (million yen)

      	Reportable Segments				Others *1	Total	Adjustments *2	Quarterly Consolidated Statements of Income *3
      	Integrated Energy	Industrial Gases & Machinery	Materials	Subtotal
      Net sales Outside customers Intersegment	82,567 1,111	60,371 922	47,316 467	190,255 2,500	7,263 6,635	197,519 9,136	-(9,136)	197,519 -
      Total	83,679	61,293	47,783	192,756	13,899	206,655	(9,136)	197,519
      Segment income	3,267	3,286	2,529	9,083	788	9,871	(1,451)	8,419

      (Note) *1. "Others" is an operating segment not included in reportable segments. "Others" represents businesses in foods, livestock industry, finance, insurance, transportation, safety, information processing, etc.

      *2. Adjustments for segment income include companywide expenses not allocated to each segment and the elimination of intersegment transactions.

      *3. Segment income is adjusted with operating income of the quarterly consolidated statements of income.

   2. Information on impairment loss on fixed assets and goodwill by reportable segment None

2. First Quarter of FY2025 (April 1, 2025 - June 30, 2025)

   1. Information related to sales, operating income (loss) by reportable segment

      (million yen)

      	Reportable Segments				Others *1	Total	Adjustments *2	Quarterly Consolidated Statements of Income *3
      	Integrated Energy	Industrial Gases & Machinery	Materials	Subtotal
      Net sales Outside customers Intersegment	85,452 1,081	62,033 331	51,517 585	199,002 1,998	7,350 6,814	206,353 8,812	-(8,812)	206,353 -
      Total	86,533	62,364	52,103	201,001	14,164	215,166	(8,812)	206,353
      Segment income	1,886	2,107	2,991	6,985	644	7,630	(1,209)	6,420

      (Note) *1. "Others" is an operating segment not included in reportable segments. "Others" represents businesses in foods, livestock industry, finance, insurance, transportation, safety, information processing, etc.

      *2. Adjustments for segment income include companywide expenses not allocated to each segment and the elimination of intersegment transactions.

      *3. Segment income is adjusted with operating income of the quarterly consolidated statements of income.

   2. Information on impairment loss on fixed assets and goodwill by reportable segment None

(Notes in the Event of Significant Changes in Shareholders' Equity)

None

(Notes on the Assumption of a Going Concern) None

(Notes to Quarterly Consolidated Statements of Cash Flows)

The Company has not prepared a quarterly consolidated statement of cash flows for the first quarter of the current fiscal year. Depreciation, including amortization related to intangible assets except goodwill, and amortization of goodwill for the first quarter of the current fiscal year are as shown below.

Three months ended June 30, 2024

(April 1, 2024 to June 30, 2024)

(million yen) Three months ended

June 30, 2025

(April 1, 2025 to June 30, 2025)

Depreciation 6,600 7,194

Amortization of goodwill 802 861

(Notes to Significant Subsequent Events) (Transfer of non-current assets)

The Company transferred non-current assets on July 16, 2025 as follows.

1. Reason for transfer

   The Company has relocated its Tokyo Head Office for the purpose of reducing its total assets as part of a reform of its financial structure, improving its operating efficiency, and improving the employee workplace, and has transferred assets as follows.

   The Company's registered address for its head office is Chuo-ku, Osaka-shi (current Osaka Head Office), and this matter does not fall under a change in the location of a head office.

2. Description of transferred assets

   Location	Details of assets	Gain on transfer
   21-8, Nishi-Shimbashi 3-chome, Minato-ku, Tokyo	Land, 1,433.15 m2 Building, Steel-framed reinforced concrete construction, 12 floors above ground, 12,462.22 m2	11,296 million yen

   (Note) The transfer price, etc. is not disclosed based on the strong wish of the transferee, but it is an appropriate amount that reflects market prices through bidding. Additionally, the gain on transfer is an amount obtained by deducting the book value and costs associated with the transfer from the transfer price.

3. Description of transferee

   Details are not disclosed due to the strong wish of the transferee.

   The Company and the transferee have no capital relationship, personnel relationship, business relationship, or relationships with related parties that require reporting. The selection of the transferee was carried out through the appropriate process.

4. Schedule of transfer

   Date of resolution at the meeting of the Board of Directors March 22, 2024 Date of conclusion of the agreement March 29, 2024

   Property handover date July 16, 2025

5. Future Outlook

   As a result of this transfer of non-current assets, the Company plans to record a gain on sale of non-current assets of 11,296 million yen under extraordinary income in the first six months of the fiscal year ending March 31, 2026.

   Additional Information

(Unit: 100 million yen)

(Unit: 100 million yen)

(Unit: 100 million yen)

* Presented here are figures for property, plant and equipment, intangible assets (including goodwill), and investments securities, etc. (which include ¥12.7 billion yen invested in property, plant and equipment in the current period.)

*"Others, Adjustments" represents the total of the "Others" business segment and "Adjustments."