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Osaka Gas announces its business plans for FY2001

April 4, 2001
Osaka Gas Co., Ltd.


Osaka Gas announced today its business plans for FY2001 together with its gas supply plans for the five years between 2001 and 2005.

  1. Business plans for FY 2001
    (1) Earnings projections
    During the new fiscal year, the company plans to achieve the operating profit of \61 billion on the non-consolidated and \72 billion on the consolidated bases. This would be a profit level projected for 2002 in the mid-term business plans, a planned achievement one year in advance.


    (2) Gas sales projections
    On the basis of the historical average temperatures, the total residential gas sales during the year have been projected to be 2.246 billion cubic meters. Non-residential gas sales, on the other hand, are expected to reach 5.092 billion cubic meters, bringing the company's total gas sales to 7.471 billion cubic meters.

    In the five-year gas sales projections, residential gas demand is expected to grow by a compound annual rate of 1.4%, and non-residential demand by 2.6%, bringing the expected total gas demand in FY2005 to 8.24 billion cubic meters. In the residential sector, the projected growth will be realized through increased use of gas floor heating and acquisition of new customers. We expect that cogeneration and gas cooling will be the main factors for growth of demand in the non-residential sector.


    (3) Capital expenditure
    During the new fiscal year, the total of \80.7 billion has been allocated for capital expenditure. Of this amount, 11.7% will be spent for LNG receiving terminals, while 61% has been earmarked for reinforcing transmission and distribution infrastructure. The remainder goes to administrative and R&D facilities.

    After FY2001, the capital expenditure will be on a declining trend and our plan projects its value in 2005 at \60 billion.


  2. Background and focuses of business plans
    The business environment in which Osaka Gas operates has been undergoing dramatic changes under globalization of the economy and deregulation of the energy industry. With the progress in deregulation of the energy market, Osaka Gas foresees further intensification of the inter-fuel competition. We are aware that the price competitiveness is a vital factor in all facets of the energy services we provide to our customers. There are three main focuses in the business plans for FY 2001.
    (1) Improving competitiveness
    Our target level of operating profit during the year is close to that of FY2004 as projected in our mid-term businessplans (FY2000-2002). By early achievement of the profit level by almost one year, we hope to respond to the expectation of our customers and our shareholders, while ensuring cash for future business expansion.
    In the energy sector,we intend to enhance the competitiveness of our natural gas services through restructuring of marketing gas appliances and systems. In LPG, electricity, and overseas businesses, we will continue our efforts to expand the scope of businesses in these fields. Overall, we are committed to improving the quality of our energy services while maintaining safety and enhancing customer service.
    In the non-energy sector,we will continue our policy of selection and concentration of business fields of our subsidiaries and affiliate by having our core companies to lead independence and self-risk-taking.


    (2) Utilization of the group's resources
    'Selection and concentration' is also a basic policy in furthering our commitments in IT and R&D. IT should be fully utilized in our business streamlining and creating new business models. In our R&D efforts, we will select the fields and topics carefully so that those subjects will be mainstays in the long-term strategies of the group. On this basis, we will seek actively alliances with manufacturers and developers for accelerated R&D at reduced costs. In developing human resources, we will implement restructuring of our human resources management system now being reviewed.


    (3) Strengthening risk management for healthy growth of the group
    The 'Code of Conduct of the Osaka Gas Group' is the written statement of the group in complying with laws and regulations as well as our corporate ethics in business conducts. We will endeavor to penetrate the code to every member of the group. At the same time, we will renew our awareness for compliance and for minimization of risks resulting from our activities.

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