Idemitsu Kosan Co., Ltd. · TSE:5019
Idemitsu Kosan — Q3 FY2023 Earnings Presentation
45 slides from Idemitsu Kosan's earnings presentation, Feb 13, 2024
Slide 1: Presentation on Results for the 3rd Quarter FY2023
Presentation on Results for the 3rd Quarter FY2023 February 13, 2024 Idemitsu Kosan Co.,Ltd.
Slide 2: Table of Contents
Table of Contents ◼ Highlights ◼ Results for the 3Q FY2023 ◼ Progress on the mid-term management plan ◼ Reference ✓ Financial results ✓ Volume ✓ Crude/product price and operation ✓ Business overview 2
Slide 3: Highlights
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Slide 4: Results for the 3Q FY2023
Results for the 3Q FY2023 ◼ Summary ✓ Operating + equity income (segment income) decreased by ¥16.6 billion y-o-y, due to reduced inventory impact. ✓ Segment income excluding inventory impact increased by ¥48.8 billion, as the positive impact of time-lag in the petroleum business, etc. offset the ne
Slide 5: Results for the 3Q FY2023
MResults for the 3Q FY2023 €& idemitsu
Slide 6: Key Topics
Key Topics ◼ Trends in Petroleum Demand and Sales ✓ Demand for core products, particularly gasoline, has stabilized after recovery from reduction under COVID-19 ✓ Jet fuel demand has remained on a recovery trend since FY2020 3Q FY2020 FY2021 FY2022 FY2023 Core products 94.6％ 98.6％ 100.9％ 97.5％ Gasol
Slide 7: Operating Environment
Operating Environment Dubai Crude Australian Coal Exchange Rate [USD/bbl] Oil Price [USD/ton] Spot Price [JPY/USD] (USD) 120.0 450.0 155.0 FY2023 FY2022 420.0 420.7 390.0 150.0 110.0 376.8 379.5 108.1 360.0 147.9 330.0 145.0 144.6 100.0 141.6 300.0 96.9 270.0 140.0 263.7 240.0 247.8 90.0 137.4 138.4
Slide 8: Overview
Overview ◼ Crude Oil/Coal/Exchange Rate [USD/bbl, USD/ton, JPY/USD] 3Q FY2022 3Q FY2023 Change Crude Oil (Dubai) 96.6 82.7 (13.9) (14.4%) Crude Oil (Brent)* 105.4 82.1 (23.3) (22.0%) Australian Coal Spot Price* 353.8 185.5 (168.3) (47.6%) Exchange Rate (TTM) 136.5 143.3 +6.8 +5.0% *Brent prices and
Slide 9: Segment Information
Segment Information ◼ Operating ＋ Equity Income [¥ billions] 3Q FY2022 3Q FY2023 Change Petroleum 139.7 187.2 +47.5 +34.0% Excluding inventory impact 1.2 114.1 +112.9 － Basic Chemicals 11.4 21.4 +10.0 +87.3% Functional Materials 16.4 22.8 +6.4 +38.9% Power and Renewable Energy 1.1 (2.3) (3.5) － Reso
Slide 10: Segment Information
Segment Information ◼ Factors Affecting Operating + Equity Income (excluding inventory impact, y-o-y) [￥billions] Lubricants, Affiliates, Cost, etc. Vietnam, fuel cost, etc. etc. etc. Power, etc. Export Volume Norway Volume Exchange non-core products rate, etc. margin Price core products margin Cons
Slide 11: Segment Information: Petroleum
Segment Information [Petroleum] YoY+¥112.9 (3Q FY22：¥1.2bn ➡ 3Q FY23：¥114.1bn) [Y-o-y change in Petroleum sales volume [Trends in Domestic Petroleum Product Margin*] (core products)] *Average margin of gasoline, diesel oil, kerosene, and heavy oil A (domestic spot –crude oil) [Thousand KL] 98.9% 97.
Slide 12: Segment Information: Chemicals, Materials, Power
Segment Information [Basic Chemicals] YoY+¥10.0bn (3Q FY22: ¥11.4bn ➡ 3Q FY23: ¥21.4bn) ✓ Sales volume improved following the regular maintenance in the last FY and sales expansion after the launch of PX operations at Chita ✓ Profits improved due to margin improvement and decrease in fuel costs, etc
Slide 13: Segment Information: Oil E&P and Coal
Segment Information [Oil E&P] YoY -¥13.2 bn [Coal] YoY -¥74.9 bn (3Q FY22：¥26.4bn ➡ 3Q FY23：¥13.3 bn) (3Q FY22：¥151.3bn ➡ 3Q FY23：¥76.4 bn) <Crude Oil Production Volume <Coal Production Volume and Brent Crude Oil Price Trends> and Australian Coal Spot Price Trends> FY2022 FY2023 FY2022 FY2023 [Thous
Slide 14: Balance Sheet
Balance Sheet [¥ billions] 3/31/2023 12/31/2023 Change 3/31/2023 12/31/2023 Change Total Current Cash and Deposits 105.2 192.3 +87.1 Liabilities 2,164.0 2,367.7 +203.7 Receivables, Total Fixed Inventory, etc. 2,626.9 2,934.5 +307.6 Liabilities 1,072.1 1,073.3 +1.2 Total Current Assets 2,732.1 3,126.
Slide 15: Progress on the Medium-Term Plan
◼Progress on the Medium-Term Plan *The icons on topics (from next page) related to progress in the medium-term plan shows business areas below Energy Diverse resource conservation Smart Yorozuya one step ahead /circulation solutions 15
Slide 16: Topics related to Progress on the Medium-term Plan (1/3)
Progress on the Medium-term Plan Topics related to Progress on the Medium-term Plan(1/3) ◼ 2nd SPS (syndiotactic polystyrene) production plant in Malaysia started commercial operation ✓ Production scale of SPS resin will be doubled with the 1st plant at Chiba ✓ Realizing more stable production and s
Slide 17: Topics related to Progress on the Medium-term Plan (2/3)
Progress on the Medium-term Plan Topics related to Progress on the Medium-term Plan(2/3) ◼ Seibu Oil formulated a new business concept for Yamaguchi Refinery ✓ Planning to terminate refinery operations in March 2024 ✓ Turning to a hub by the 2030s for carbon-free energy for local consumption, recycl
Slide 18: Topics related to Progress on the Medium-term Plan (3/3)
Progress on the Medium-term Plan Topics related to Progress on the Medium-term Plan(3/3) ◼ Construction of the integrated laboratory “Innovation Center” (tentative name) within the Chiba Complex ✓ Most of the functions of current 13 domestic laboratories will be aggregated in the Innovation Center ✓
Slide 19: Reference
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Slide 20: Financial Results: Net Sales by Segment
Financial Results Financial Results ◼ Net Sales by segment [¥ billions] 3Q FY2022 3Q FY2023 Change Petroleum 5,668.5 5,142.8 (525.7) (9.3%) Basic Chemicals 514.0 446.6 (67.4) (13.1%) Functional Materials 381.2 382.1 +0.9 +0.2% Power and Renewable Energy 148.0 108.5 (39.6) (26.7%) Resources* 495.5 31
Slide 21: Financial Results: Quarterly Segment Income (Cumulative)
Financial Results Financial Results ◼ Quarterly segment income (cumulative, exc. inventory impact) [¥ billions] FY2022 FY2023 1Q 2Q 3Q 4Q 1Q 2Q 3Q Petroleum 57.4 61.1 1.2 17.3 18.4 105.0 114.1 Equity income 7.0 12.4 12.8 12.9 4.9 3.8 6.9 Basic Chemicals 8.1 14.2 11.4 10.1 (1.4) 12.0 21.4 Equity inco
Slide 22: Financial Results: Quarterly Segment Income (Q on Q)
Financial Results Financial Results ◼ Quarterly segment income (Q on Q, exc. inventory impact) [¥ billions] FY2022 FY2023 1Q 2Q 3Q 4Q 1Q 2Q 3Q Petroleum 57.4 3.7 (59.9) 16.1 18.4 86.6 9.0 Equity income 7.0 5.4 0.4 0.1 4.9 (1.0) 3.1 Basic Chemicals 8.1 6.1 (2.8) (1.3) (1.4) 13.4 9.4 Equity income (0.
Slide 23: Forecasts for FY2023
Forecasts Forecasts for FY2023 (unchanged from the announcement on 11/14) ◼ Crude Oil/Coal/Exchange Rate [USD/bbl, USD/ton, JPY/USD] 5/9 11/14 Assumptions Change (from Oct.) Forecasts Forecasts Crude Oil (Dubai) 80.0 83.6 +3.6 +4.5% 85.0 Crude Oil (Brent)* 85.0 83.2 (1.8) (2.1%) 86.5 Australian Coal
Slide 24: Segment Information (Forecasts)
Forecasts Segment Information (unchanged from the announcement on 11/14) ◼ Operating ＋ Equity Income [¥ billions] 5/9 11/14 Change Forecasts Forecasts Petroleum 43.0 135.0 +92.0 +214.0% Excluding inventory impact 73.0 90.0 +17.0 +23.3% Basic Chemicals 21.0 21.0 ー ー Functional Materials 19.0 23.0 +4.
Slide 25: Sensitivity
Financial Results Sensitivity ◼ Major items affecting operating profit by changes in assumptions (4Q) Assumption Income Assumption from Jan. Range of Segment impact Major Factors Items (announced on fluctuation 11/14) (¥ billions) Fuel cost, Crude oil price 85.0$/bbl ±10$/bbl ±11.0 time-lag Excludin
Slide 26: Sales Volume: Petroleum
Volume Sales Volume ◼ Petroleum [thousand KL,％] 3Q FY2022 3Q FY2023 Change Gasoline 9,902 9,699 (203) (2.1%) Naphtha 288 277 (11) (3.8%) Jet Fuel 1,751 1,882 +131 +7.5% Kerosene 2,092 1,940 (152) (7.3%) Diesel Oil 7,788 7,651 (137) (1.8%) Heavy Fuel Oil A 2,288 2,223 (65) (2.9%) Heavy Fuel Oil C 1,9
Slide 27: Sales Volume
Volume Sales Volume ◼ Basic Chemicals [kt,%] 3Q FY2022 3Q FY2023 Change Basic Chemicals 2,548 2,606 +58 +2.3% ◼ Functional Materials [KKL,kt,%] 3Q FY2022 3Q FY2023 Change Lubricants 871 855 (16) (1.8%) Performance Chemicals 494 501 +7 +1.4% *Lubricants include sales overseas ◼ Power/Renewable Energy
Slide 28: Production Volume
Volume Production Volume ◼ Resources (Oil E&P) [KBOED,%] 3Q FY2022 3Q FY2023 Change Vietnam 15.6 14.6 (1.0) (6.2%) Norway 15.3 14.2 (1.1) (7.0%) Total('000BOED) 30.9 28.8 (2.0) (6.6%) Total('000BOE) 8,430 7,874 (556) (6.6%) *The numbers reflect our rights and ownership ratios based on our equity sha
Slide 29: Crude Oil Prices (Dubai and Brent)
Crude price Crude Oil Prices(Dubai and Brent) [USD/bbl] 130 Brent Dubai 110 90 70 50 30 10 Apr-18 Apr-19 Apr-20 Apr-21 Apr-22 Apr-23 29
Slide 30: Gasoline-Crude Oil (Domestic spot price and spread)
Product market price Gasoline-Crude Oil(Domestic spot price and spread) [Price :JPY/L] [Spread：JPY/L] 140 25 Spread 120 Crude oil Gasoline 20 100 15 80 60 10 40 5 20 0 0 Apr-19 Apr-20 Apr-21 Apr-22 Apr-23 30
Slide 31: Diesel-Crude Oil (Domestic spot price and spread)
Product market price Diesel-Crude Oil(Domestic spot price and spread) [Price :JPY/L] [Spread：JPY/L] 140 25 Spread 120 Crude oil Diesel oil 20 100 15 80 60 10 40 5 20 0 0 Apr-19 Apr-20 Apr-21 Apr-22 Apr-23 31
Slide 32: Gasoline-Crude Oil (Singapore spot price and spread)
Product market price Gasoline-Crude Oil(Singapore spot price and spread) [Price :USD/bbl] [Spread：USD/bbl] 160 40 Spread 140 35 Dubai Gasoline 30 120 25 100 20 80 15 60 10 40 5 20 0 0 -5 Apr-19 Apr-20 Apr-21 Apr-22 Apr-23 32
Slide 33: Diesel-Crude Oil (Singapore spot price and spread)
Product market price Diesel-Crude Oil(Singapore spot price and spread) [Price :USD/bbl] [Spread：USD/bbl] 180 70 Spread 160 Dubai 60 Diesel Oil 140 50 120 100 40 80 30 60 20 40 10 20 0 0 Apr-19 Apr-20 Apr-21 Apr-22 Apr-23 33
Slide 34: Para-Xylene, Mixed Xylene-Naphtha
Product market price Para-Xylene, Mixed Xylene-Naphtha (price and spread) [Price :USD/ton] [Spread：USD/ton] 1,400 600 PX spread Mx spread Naptha PX MX 1,200 500 1,000 400 800 300 600 200 400 100 200 0 0 Apr-19 Apr-20 Apr-21 Apr-22 Apr-23 34
Slide 35: Styrene Monomer-Naphtha
Product market price Styrene Monomer-Naphtha (price and spread) [Price :USD/ton] [Spread：USD/ton] 1,600 800 SM spread Naptha 1,400 700 SM 1,200 600 1,000 500 800 400 600 300 400 200 200 100 0 0 Apr-19 Apr-20 Apr-21 Apr-22 Apr-23 35
Slide 36: Operational Data
Operation Operational Data ◼ Refineries Utilization FY2023 FY2019 FY2020 FY2021 FY2022 （3Q） 87% 78% 77% 83％ 78％ *on BCD basis(including regular maintenance) ◼ Number of Service Stations FY2023 FY2019 FY2020 FY2021 FY2022 （3Q） 6,384 6,311 6,216 6,136 6,012 36
Slide 37: Overview of the Company
Business Overview Overview of the Company FY2022, actual or as of the end of March 2023 ∎ Petroleum Segment ∎ Functional Materials Segment Refining Capacity 945 KBD *1,2) (Lubricants, Performance Chemicals, Electronic Domestic fuel oil sales volume Materials, Bitumen (High Performance Asphalt),
Slide 38: Petroleum Segment
Business Overview Petroleum Segment as of the end of March 2023 [KB/D] Operating Refining Refinery RH FCC RFCC FLG Equity Ratio Company Capacity Japan Idemitsu Hokkaido 150 42 33 Kosan Chiba 190 40 45 Aichi 160 60 50 Showa Yokkaichi Yokkaichi 255 45 61 75.0% Sekiyu Toa Oil Keihin 70 42 27 100.0% Sei
Slide 39: Basic Chemicals Segment
Business Overview Basic Chemicals Segment as of the end of March 2023 [mil tons/year] Production Capacity for core products Operating Company Complex/Factory/Refinery Styrene Equity Ratio Ethylene Para-Xylene Mixed Xylene Monomer Japan Idemitsu Kosan Chiba 0.374 0.265 0.210 Aichi 0.357 0.170 Tokuyam
Slide 40: Functional Materials Segment (1/2)
Business Overview Functional Materials Segment (1/2) Lubricants Performance Chemicals ◆Product categories ◆Product categories ・Automotive lubricants (engine oil, etc.) ・Engineering plastics, adhesives materials, derivative ・Grease products, solvents and functional materials ・Industrial lubricants (h
Slide 41: Functional Materials Segment (2/2)
Business Overview Functional Materials Segment (2/2) Electronic Materials Bitumen (High Performance Asphalt) ◆Product categories ◆Asphalt manufacturer which aims to develop state-of-the-art ・Organic EL materials technologies ・Display semiconductor materials etc. ・Recycling, longer life, carbon neutr
Slide 42: Power/Renewable Energy Segment
Business Overview Power /Renewable Energy Segment Stake Owned Power generation capacity* Power Category Power Plant Operating Company (%) (10,000 KW) Solar 34 domestic locations Idemitsu, other ー 18.7 Biomass Keihin Biomass Power Plant (Kanagawa) Keihin Biomass Power 100 4.9 Tosa Power Plant (Kochi)
Slide 43: Resources Segment (Gas and Oil E&P)
Business Overview Resources Segment (Gas and Oil E&P) Business Overview Production Oil/Gas Reserves 1. Producing and selling crude oil/gas in Vietnam and Norway ◆Reserves *2,3 [million BOE] 2. Exploration and development of gas in Vietnam and other 150 parts of Southeast Asia to shift to production
Slide 44: Resource Segment (Coal)
Business Overview Resource Segment (Coal) Business Overview Business Structure Reforms [Business Strategy] ◆Idemitsu Green Energy Pellets (black pellets) ◆Stable supply and profit maximization by leveraging the highly competitive Boggabri Mine ・CO2 emissions can be reduced by replacing coal with ◆En
Slide 45: Precaution statement about forecasts
Precaution statement about forecasts Any information about forecasts for the Company’s operating results, management strategy and management policy contained in this documents other than historical facts is prepared, according to judgments made by the top management of the Company based on informati