Air Water announced its annual financial results for FY2014, ending on March 31 of this year. Sales increased by 18.7%, operating profit by 25.7%, ordinary profit by 3.2%, and net profit by 4.6%, exceeding the previous record in all of these thanks to the recovery in its industrial gas segment, including blast furnaces and to its M&A projects in the medical as well as in the agriculture and food business segments.

For the industrial gas segment, sales were up by 9%, while ordinary profit decreased by 4%. The volume of air gas sold has been recovering in both the on-site and cylinder supply segments. However, increase in cost due to the rise of the electricity fees and the cost of fuel for distribution has effected profit. The cost of utilities rose to over 1 billion yen. Air Water recovered 70 – 80% of these costs by revision of the sales price. The company will continue working on price revision because additional increases in utility fees are expected.

Regarding its overseas business, Air Water acquired the majority of the stock of the local Indian industrial gas company Ellenbarrie Industrial Gases last year. Air Water has been setting up a liquid gas business in India and it will expand its liquid gas business using VSUs in Vietnam too in this year.

As one of the drivers for growth in business, the medical segment grew significantly by 52% in sales and also grew by 19% in ordinary profit. The 5 business pillars of medical gas, these being construction of medical facilities and hospitals, medical services such as SPD and sterilization services, as well as home therapy have been moving along favorably, contributed to by M&A and other factors.

Sales in the agriculture and food segments also grew by 51% and ordinary profit by 95%. Beverage production and the OEM business which were fully consolidated as of this financial term contributed to the growth of the agriculture and food segments.

Other business segments have been expanding to reach over 100 billion, following along after the industrial gas and medical segments. Sales were up by 17% and ordinary profit by 24% as well. The seawater company which sells salt to convenience stores and the fast food chain has been doing well.

Capital expenditure for FY2014 came to 32.8 billion yen while depreciation and amortization came to 24.3 billion yen. For FY2015, Air Water expects capital expenditure of 33.3 billion yen and depreciation and amortization of 25.8 billion yen.

For FY2015, Air Water expects growth in sales and profit in all segments. Its industrial gas segment is expected to increase by 5.7% in terms of sales and 7.9% in terms of ordinary profit. The Japanese industrial gas market is expected to grow by 2-3%. Air Water is putting effort especially into expanding its local gas business, mainly its cylinder business.

In addition, Air Water is focusing on their power generation business as their next business segment whereby they will establish a new division, the Power Generation Strategy Division. Yasuo Imai, the president of the division, said “We would like to setup a system for dealing with costs using biomass and coal fired power generation operations to cope with skyrocketing electric power fees which account for the majority of manufacturing costs for air gas.”