Idemitsu Kosan Co., Ltd. · TSE:5019
Idemitsu Kosan — Q1 FY2022 Earnings Presentation
51 slides from Idemitsu Kosan's earnings presentation, Aug 9, 2022
Slide 1: Presentation on Results for the 1st Quarter FY2022
Presentation on Results for the 1st Quarter FY2022 August 9, 2022 Idemitsu Kosan Co.,Ltd.
Slide 2: Table of Contents
Table of Contents Highlights Results for the 1Q FY2022 Forecasts for FY2022 Reference Progress in the mid-term management plan Financial results Volume Crude/product price and operation Business overview 2
Slide 3: Highlights
€& idemitsu Highlights # © Idemitsu Kosan Co, Ltd. All Rights Fi
Slide 4: Results for the 1Q FY2022
Results for the 1Q FY2022 Summary Quarterly operating + equity income (“segment income”) increased by ¥124.5 billion, driven by inventory impact (YoY+¥89.9 billion) due to crude oil price increase Segment income excluding inventory impact increased by only ¥34.6 billion. Coal price increase an
Slide 5: Forecasts for FY2022
Forecasts for FY2022 Summary Performance forecasts were revised upwards in light of the large discrepancy between current market and the latest forecasts on resource prices, Singapore product margins, and foreign exchange rates, as well as 1Q progress toward full-year forecasts The outperforme
Slide 6: Major items affecting performance by changes in assumptions
Forecasts for FY2022 Major items affecting performance by changes in assumptions (FY2022 2-4Q) While we have revised our forecasts, the environment remains unclear due to various factors including the Russia/Ukraine situation and global inflation Key assumptions may change significantly in the
Slide 7: Results for the 1Q FY2022
mResults for the 1Q FY2022 €& idemitsu
Slide 8: Key Topics
Key Topics Trends in Petroleum Demand Easing of restricted activities under COVID-19 led to recovery of demand for core products and jet fuel in 1Q Demand recovery continued in July due to growth supported by weather trends FY22 FY22 FY20 FY21 1Q results Jul.（flash） Core products 94.6％ 98.6％ 1
Slide 9: Operating Environment
Operating Environment Dubai Crude Australian Coal Exchange Rate [USD/bbl] Oil Price [USD/ton] Spot Price [JPY/USD] (USD) 120.0 420.0 135.0 390.0 110.0 360.0 376.9 130.0 129.6 108.1 330.0 100.0 300.0 125.0 95.6 270.0 263.7 90.0 240.0 120.0 210.0 183.9 116.2 80.0 180.0 115.0 78.3 150.0 167.5 113.7 70.
Slide 10: Overview
Overview Crude Oil/Coal/Exchange Rate [USD/bbl, USD/ton, JPY/USD] FY2021 1Q FY2022 1Q Change Crude Oil (Dubai) 66.9 108.1 41.1 +61.4% Crude Oil (Brent)* 60.9 101.4 40.5 +66.6% Australian Coal Spot Price* 89.1 263.7 174.6 +196.0% Exchange Rate (TTM) 109.5 129.6 20.1 +18.3% *Brent prices and Austral
Slide 11: Segment Information
Segment Information Operating ＋ Equity Income [¥ billions] FY2021 1Q FY2022 1Q Change Petroleum 98.9 216.6 117.7 +119.1% Excluding inventory impact 29.6 57.4 27.8 +93.9% Basic Chemicals 6.7 8.1 1.4 +20.6% Functional Materials 4.3 3.3 (1.0) (23.7%) Power and Renewable Energy (1.0) (3.7) (2.7) － Res
Slide 12: Segment Information: Factors Affecting Operating + Equity Income
Segment Information Factors Affecting Operating + Equity Income (excluding inventory impact, year on year) [￥billions] Consolidated Price adjustment, etc. Margin Export , etc. Power, Margin (time-lag) etc. Vietnam, etc. Cost, etc. Volume Lubricants, etc. Shift to Volume equity method Fuel cost, no
Slide 13: Segment Information: Petroleum
Segment Information [Petroleum] YoY＋¥27.8bn (FY21 1Q：¥29.6bn ➡ FY22 1Q：¥57.4bn) [Y-o-y change in Petroleum [Trends in Domestic Petroleum Product Margin*] sales volume (core products)] *Average margin of gasoline, diesel oil, kerosene, and heavy oil A (domestic spot –crude oil) [Thousand KL] FY2021 F
Slide 14: Segment Information: Basic Chemicals, Functional Materials, Power
Segment Information [Basic Chemicals]YoY¥1.4 bn (FY21 1Q ：¥6.7 bn ➡ FY22 1Q ：¥8.1 bn) PX and MX margins increased due to tighter supply/demand balance, while SM margin decreased in response to major SDMs in Asia in the last FY Increase in fuel costs, etc. offset improvements in product margins [
Slide 15: Segment Information: Oil E&P and Coal
Segment Information [Oil E&P] YoY -¥5.8 bn [Coal] YoY ¥24.5 bn (FY21 1Q：¥12.4bn ➡ FY22 1Q：¥6.5 bn) (FY21 1Q：¥0.6bn ➡ FY22 1Q：¥25.1 bn) <Crude Oil Production Volume <Coal Production Volume and Brent Crude Oil Price Trends> and Australian Coal Spot Price Trends> [Thousand BOE] [USD/bbl] [Thousand tons
Slide 16: Balance Sheet
Balance Sheet [¥ billions] 3/31/2022 6/30/2022 Change 3/31/2022 6/30/2022 Change Cash and Total Current 140.3 161.4 21.1 2,061.3 2,402.2 340.9 Deposits Liabilities Receivables, Total Fixed 2,227.8 2,670.2 442.4 1,103.4 1,156.0 52.6 Inventory, etc. Liabilities Total Current 2,368.1 2,831.6 463.5 Tota
Slide 17: Forecasts for FY2022
€& idemitsu mForecasts for FY2022 # © Idemitsu Kosan Co, Ltd. All Rights Fi 17
Slide 18: Forecasts for FY2022
Forecasts for FY2022 Crude Oil/Coal/Exchange Rate [USD/bbl, USD/ton, JPY/USD] 5/10 Revised Assumptions Change Forecasts Forecasts (from Jul.) Crude Oil (Dubai) 100.0 102.0 2.0 +2.0% 100.0 Crude Oil (Brent)* 102.5 105.1 2.6 +2.5% 102.5 Australian Coal Spot Price * 180.0 310.1 130.1 +72.3% 300.0 Exc
Slide 19: Segment Information
Segment Information Operating ＋ Equity Income [¥ billions] 5/10 Revised Change Forecasts Forecasts Petroleum 100.0 216.0 116.0 +116.0% Excluding inventory impact 50.0 76.0 26.0 +52.0% Basic Chemicals 10.0 10.0 － － Functional Materials 20.0 19.0 (1.0) (5.0%) Power and Renewable Energy (6.0) (9.0) (
Slide 20: Segment Information: Factors Affecting Operating + Equity Income
Segment Information Factors Affecting Operating + Equity Income [¥ billions] (excluding inventory impact, Compared to the 5/10 forecasts) Price Cost etc. Margin (time-lag) Margin Export Volume, etc. Lubricants Cost etc. Cost etc. etc. Fuel cost, non-core product Oil E＆P Coal margin, etc. 3.0 75.0
Slide 21: Segment Information: Petroleum, Basic Chemicals, Functional Materials
Segment Information [Petroleum] YoY +¥26.0 bn (5/10 forecast: ¥50.0 bn ➡ Revised forecast: ¥76.0 bn) Expected positive time-lag effects and higher Singapore product margins are partially offset by increases in refining fuel costs and non-core products margins [Basic Chemicals] YoY ±¥0.0 bn (5/10 f
Slide 22: Segment Information: Power, Oil E&P, Coal
Segment Information [Power and Renewable Energy] YoY -¥3.0 bn (5/10 forecast : -¥6.0 bn ➡ Revised forecast: -¥9.0 bn) Forecasts were revised downward due to increased procurement costs in the power business [Oil E&P] YoY +¥3.0 bn (5/10 forecast : ¥20.0 bn ➡ Revised forecast : ¥23.0 bn) Forecasts
Slide 23: Reference Materials
€& idemitsu mReference Materials # © Idemitsu Kosan Co, Ltd. All Rights Fi 23
Slide 24: Topics on the progress in the mid-term plan
Progress in the mid-term plan Topics on the progress in the mid-term plan Announcement on the Acquisition of Shares in Seibu Oil Company Limited (to make it a subsidiary) (Petroleum/Basic Chemicals) Review the Idemitsu group’s manufacturing and supply frameworks in response to reduced domestic d
Slide 25: Financial Results: Net Sales by segment
Financial Results Financial Results [¥ billions] Net Sales by segment FY2021 1Q FY2022 1Q Change Petroleum 998.7 1,754.2 755.5 +75.6% Basic Chemicals 121.8 187.7 66.0 +54.2% Functional Materials 95.1 120.4 25.3 +26.7% Power and Renewable Energy 25.7 36.4 10.7 +41.7% Resources* 60.3 105.4 45.1 +74.
Slide 26: Quarterly segment income (cumulative)
Financial Results Financial Results Quarterly segment income (cumulative, exc. inventory impact) [¥ billions] FY2021 FY2022 1Q 2Q 3Q 4Q 1Q Petroleum 29.6 45.1 73.7 136.5 57.4 Equity income 6.0 8.6 12.4 9.2 7.0 Basic Chemicals 6.7 10.9 7.6 8.2 8.1 Equity income 0.1 0.7 0.8 1.2 (0.1) Functional Mate
Slide 27: Quarterly segment income (Q on Q)
Financial Results Financial Results Quarterly segment income (Q on Q, exc. inventory impact) [¥ billions] FY2021 FY2022 1Q 2Q 3Q 4Q 1Q Petroleum 29.6 15.4 28.6 62.8 57.4 Equity income 6.0 2.6 3.8 (3.2) 7.0 Basic Chemicals 6.7 4.2 (3.3) 0.5 8.1 Equity income 0.1 0.5 0.1 0.5 (0.1) Functional Materia
Slide 28: Sales Volume: Petroleum
Volume Sales Volume Petroleum [thousand KL,％] FY 2021 1Q FY 2022 1Q Change Gasoline 3,074 3,148 74 2.4% Naphtha 20 111 91 453.3% Jet Fuel 377 534 157 41.6% Kerosene 472 479 7 1.5% Diesel Oil 2,446 2,456 9 0.4% Heavy Fuel Oil A 704 694 (10) (1.4%) Heavy Fuel Oil C 527 652 125 23.7% Total Domestic S
Slide 29: Sales Volume: Chemicals, Materials, Power
Volume Sales Volume Basic Chemicals [kt,%] FY 2021 1Q FY 2022 1Q Change Basic Chemicals 886 890 4 0.4% Functional Materials [KKL,kt,%] FY 2021 1Q FY 2022 1Q Change Lubricants 303 293 (10) (3.4%) Performance Chemicals 193 184 (8) (4.3%) *Lubricants include sales overseas Power/Renewable Energy
Slide 30: Production Volume
Volume Production Volume Resources (Oil E&P) [KBOED,%] FY 2021 1Q FY 2022 1Q Change Norway 26.8 15.6 (11.2) (41.8%) Vietnam 9.9 14.7 4.8 48.4% Total('000BOED) 36.7 30.3 (6.4) (17.5%) Total('000BOE) 3,301 2,725 (576) (17.4%) *The numbers reflect our rights and ownership ratios based on our equity s
Slide 31: Sales Volume (Forecasts): Petroleum
Appendix Sales Volume(Forecasts) (volume data) Petroleum *No revision from 5/10 forecasts [KKL,％] FY2021 FY2022* Change Gasoline 12,711 12,780 69 0.5% Naphtha 266 230 (36) (13.5%) Jet fuel 1,729 2,280 551 31.9% Kerosene 3,920 3,770 (150) (3.8%) Diesel Oil 9,926 10,150 224 2.3% Heavy Fuel Oil A 3,2
Slide 32: Sales Volume (Forecast): Chemicals, Materials, Power
Appendix Sales Volume(Forecast) (volume data) Basic Chemicals *No revision from 5/10 forecast [kt,%] FY2021 FY2022* Change Basic Chemicals 3,744 3,870 126 3.4% Functional Materials [KKL,kt,%] *No revision from 5/10 forecast FY2021 FY2022* Change Lubricants* 1,183 1,230 47 4.0% Performance Chemic
Slide 33: Production Volume (Forecasts)
Appendix Production Volume(Forecasts) (volume data) Resources (Oil E&P) *No revision from 5/10 forecasts [KBOED,%] FY2021 FY2022* Change Norway 23.3 14.8 (8.5) (36.7%) Vietnam 10.5 14.6 4.1 38.8% Production total (KBOED) 33.8 29.3 (4.5) (13.2%) Production total (KBOE) 12,351 10,700 (1,651) (13.5%)
Slide 34: Crude Oil Prices (Dubai and Brent)
Appendix Crude Oil Prices(Dubai and Brent) (Crude price) [USD/bbl] 130 Brent Dubai 110 90 70 50 30 10 Apr-17 Apr-18 Apr-19 Apr-20 Apr-21 Apr-22 34
Slide 35: Gasoline-Crude Oil (Domestic spot price and spread)
Appendix Gasoline-Crude Oil(Domestic spot price and spread) (Product market) [Price :JPY/L] [Spread：JPY/L] 140 25 120 20 100 15 80 60 10 40 Spread 5 20 Crude oil Gasoline 0 0 Apr-17 Apr-18 Apr-19 Apr-20 Apr-21 Apr-22 35
Slide 36: Diesel-Crude Oil (Domestic spot price and spread)
Appendix Diesel-Crude Oil(Domestic spot price and spread) (Product market) [Price :JPY/L] [Spread：JPY/L] 140 25 120 20 100 15 80 60 10 40 Spread 5 20 Crude oil Diesel oil 0 0 Apr-17 Apr-18 Apr-19 Apr-20 Apr-21 Apr-22 36
Slide 37: Gasoline-Crude Oil (Singapore spot price and spread)
Appendix Gasoline-Crude Oil(Singapore spot price and spread) (Product market) [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-17 Apr-18 Apr-19 Apr-20 Apr-21 Apr-22 37
Slide 38: Diesel-Crude Oil (Singapore spot price and spread)
Appendix Diesel-Crude Oil(Singapore spot price and spread) (Product market) [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-17 Apr-18 Apr-19 Apr-20 Apr-21 Apr-22 38
Slide 39: Para-Xylene, Mixed Xylene-Naphtha
Appendix Para-Xylene, Mixed Xylene-Naphtha (Product market) (price and spread) [Price :USD/ton] [Spread：USD/ton] 1,400 700 PX spread Mx spread Naptha 1,200 PX MX 600 1,000 500 800 400 600 300 400 200 200 100 0 0 Apr-17 Apr-18 Apr-19 Apr-20 Apr-21 Apr-22 39
Slide 40: Styrene Monomer-Naphtha
Appendix Styrene Monomer-Naphtha (Product market) (price and spread) [Price :USD/ton] [Spread：USD/ton] 1,600 1,000 900 1,400 800 1,200 700 1,000 600 800 500 400 600 300 400 200 200 100 SM spread Naptha SM 0 0 Apr-17 Apr-18 Apr-19 Apr-20 Apr-21 Apr-22 40
Slide 41: Operational Data
Appendix Operational Data (Operational data) Refineries Utilization FY2022 FY2017 FY2018 FY2019 FY2020 FY2021 1Q Idemitsu 88% 88% Kosan 87% 78% 77% 82% Former 88% 93% Showa Shell *on BCD basis Number of Service Stations FY2022 FY2017 FY2018 FY2019 FY2020 FY2021 1Q Idemitsu 3,545 3,501 3,446 3,42
Slide 42: Overview of the Company
Appendix Overview of the Company (Business Overview) as of the end of March, 2022 ∎ Petroleum Segment ∎ Functional Materials Segment Refining Capacity 945 KBD *1) (Lubricants, Performance chemicals, Electronic Domestic fuel oil sales volume materials, Functional asphalt, Agri-bio, Lithium 34 mil
Slide 43: Petroleum Segment
Appendix Petroleum Segment (Business Overview) as of the end of March, 2022 [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 2
Slide 44: Basic Chemicals Segment
Appendix Basic Chemicals Segment (Business Overview) as of the end of March, 2022 [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 0.37 0.27 0.21 Aichi 0.17 Tokuy
Slide 45: Functional Materials Segment
Appendix Functional Materials Segment (Business Overview) Lubricants Performance Chemicals ◆Product categories ◆Product categories ・Automotive lubricants (engine oil, etc.) ・Engineering plastics ・Grease ・Adhesives Engineering ・Industrial lubricants (hydraulic actuation oil, cutting oil, ・Solvents, e
Slide 46: Functional Materials Segment
Appendix Functional Materials Segment (Business Overview) Electronic Materials High Performance Asphalt ◆Product categories ◆Asphalt manufacturer which aims to develop state-of- ・Organic EL materials the-art technologies ・Display semiconductor materials etc. ・Recycling, longer life, carbon neutralit
Slide 47: Power / Renewable Energy Segment
Appendix Power /Renewable Energy Segment (Business Overview) Power generation Stake Owned Power Category Power Plant Operating Company capacity* (%) (10,000 KW) Solar 34 domestic locations Idemitsu, other ー 18.1 Biomass Keihin Biomass Power Plant (Kanagawa) Keihin Biomass Power 100 4.9 Tosa Power Pl
Slide 48: Resources Segment (Oil E&P, Gas)
Appendix Resources Segment (Oil E&P, Gas) (Business Overview) Business Overview Production Oil/Gas Reserves 1. Producing crude oil/gas in Norwegian North Sea and ◆Reserves *2,3 selling them mainly in Europe [million BOE] 110 2. Commencing gas field development in Vietnam and other parts of Southeast
Slide 49: Reserve Estimates
Appendix Reserve Estimates (Business Overview) Reserve Estimation Standards ・Idemitsu’s reserves estimation is conducted based on PRMS (Petroleum Resources Management System) standards ・PRMS standards were established jointly by the Society of Petroleum Engineers (SPE), the World Petroleum Congres
Slide 50: Resources Segment (Coal)
Appendix Resources Segment (Coal) (Business Overview) Business Overview Low-carbon Solutions 1. Owns Australian coal mines and has an integrated supply chain from production to sales to provide a ◆Idemitsu Green Energy Pellets stable supply of low-cost coal to Asia (black pellets) 2. Provides high-e
Slide 51: 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