Slide 1: Presentation on Results for the 3rd Quarter FY2022
Presentation on Results for the 3 rd Quarter FY2022 February 14, 2023 Idemitsu Kosan Co.,Ltd.
Slide 2: Table of Contents
Table of Contents ◼ Highlights ◼ Results for the 3Q 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 3Q FY2022
Results for the 3Q FY2022 ◼ Summary ✓ Operating + equity income (segment income) increased by ¥26.5 billion year-on-year, as improvements in the resources business resulting from soaring coal prices partially offset decreased margins on non-core products such as naphtha and increased fuel costs in t
Slide 5: FY2022 Forecasts and Shareholder Returns
FY2022 Forecasts and Shareholder Returns ◼ Summary ✓ While trends in the business environment remain unclear amid concerns of an economic slowdown due to global inflation on the one hand and expectations of recovery in demand due to relaxation of the zero-COVID policy in China on the other, forecast
Slide 6: Results for the 3Q FY2022
mResults for the 3Q FY2022 €& idemitsu
Slide 7: Key Topics
Key Topics ◼ Trends in Petroleum Demand ✓ Demand for core products and jet fuel both recovered due to easing of COVID-related activity restrictions ✓ Growth is expected to slow down in 4Q, as activity restrictions were also eased in 4Q of the previous fiscal year FY22 FY22 FY20 FY21 (1-3Q) (forecast
Slide 8: Operating Environment
Operating Environment Dubai Crude Australian Coal Exchange Rate [USD/bbl] Oil Price [USD/ton] Spot Price [JPY/USD] (USD) 120.0 450.0 150.0 420.7 420.0 145.0 108.1 390.0 110.0 376.8 379.5 141.6 360.0 140.0 138.4 330.0 100.0 135.0 96.9 300.0 95.6 129.6 130.0 270.0 90.0 263.7 84.8 240.0 125.0 210.0 183
Slide 9: Overview
Overview ◼ Crude Oil/Coal/Exchange Rate [USD/bbl, USD/ton, JPY/USD] FY2021 3Q FY2022 3Q Change Crude Oil (Dubai) 72.3 96.6 +24.3 +33.6% Crude Oil (Brent)* 67.7 105.4 +37.6 +55.5% Australian Coal Spot Price* 121.7 353.8 +232.1 +190.7% Exchange Rate (TTM) 111.1 136.5 +25.4 +22.9% *Brent prices and Aus
Slide 10: Segment Information
Segment Information ◼ Operating ＋ Equity Income [¥ billions] FY2021 3Q FY2022 3Q Change Petroleum 236.8 139.7 (97.1) (41.0%) Excluding inventory impact 73.7 1.2 (72.5) (98.4%) Basic Chemicals 7.6 11.4 +3.8 +49.5% Functional Materials 14.2 16.4 +2.1 +15.1% Power and Renewable Energy (7.6) 1.1 +8.7 －
Slide 11: Segment Information
Segment Information ◼ Factors Affecting Operating + Equity Income (excluding inventory impact, year on year) [￥billions] Exchange rate, etc. Consolidated Price adjustment, etc. core products margin non-core products Vietnam, margin etc. Margin, Asphalt, fuel etc. etc. Shift to cost, etc. equity Powe
Slide 12: Segment Information: Petroleum
Segment Information [Petroleum] YoY-¥72.5bn (FY21 3Q：¥73.7bn ➡ FY22 3Q：¥1.2bn) [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) (YoY) 101.2% 106.5% 100
Slide 13: Segment Information
Segment Information [Basic Chemicals] YoY＋¥3.8bn (FY21 3Q：¥7.6bn ➡ FY22 3Q：¥11.4bn) ✓ PX/MX product margins improved due to tighter supply/demand balance ✓ Improved product margins were partially offset by reduced sales volumes and increased fuel costs [USD/ton] Product FY2021 3Q FY2022 3Q Change Pr
Slide 14: Segment Information: Oil E&P and Coal
Segment Information [Oil E&P] YoY -¥8.5 bn [Coal] YoY +¥129.8 bn (FY21 3Q：¥34.9bn ➡ FY22 3Q：¥26.4 bn) (FY21 3Q：¥21.5bn ➡ FY22 3Q：¥151.3 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
Slide 15: Balance Sheet
Balance Sheet [¥ billions] 3/31/2022 12/31/2022 Change 3/31/2022 12/31/2022 Change Cash and Total Current 140.3 113.7 (26.6) 2,061.3 2,400.8 339.5 Deposits Liabilities Receivables, Total Fixed 2,227.8 2,866.2 638.4 1,103.4 1,146.6 43.2 Inventory, etc. Liabilities Total Current 2,368.1 2,979.9 611.8
Slide 16: Forecasts for FY2022
€& idemitsu mForecasts for FY2022 # © Idemitsu Kosan Co, Ltd. All Rights Fi 16
Slide 17: Forecasts for FY2022
Forecasts for FY2022 ◼ Crude Oil/Coal/Exchange Rate [USD/bbl, USD/ton, JPY/USD] 11/8 Revised Assumptions Change Forecast Forecast (from Jan.) Crude Oil (Dubai) 96.2 92.4 (3.8) (3.9%) 80.0 Crude Oil (Brent)* 102.4 101.2 (1.2) (1.2%) ー Australian Coal Spot Price * 347.8 360.2 +12.3 +3.6% ー Exchange Ra
Slide 18: Segment Information
Segment Information ◼ Operating ＋ Equity Income [¥ billions] 11/8 Revised Change Forecasts Forecasts Petroleum 205.0 40.0 (165.0) (80.5%) Excluding inventory impact 85.0 10.0 (75.0) (88.2%) Basic Chemicals 18.0 14.0 (4.0) (22.2%) Functional Materials 17.0 21.0 +4.0 +23.5% Power and Renewable Energy
Slide 19: Segment Information
Segment Information ◼ Factors Affecting Operating + Equity Income [¥ billions] (excluding inventory impact, Compared to the 11/8 forecasts) Increase in Procurement Costs Functional Exchange Chemicals, rate, Export Vietnam etc. Consolidated etc. Margin Power adjustment, Volume etc. Volume Core Produc
Slide 20: Segment Information
Segment Information [Petroleum] -¥75.0bn (11/8 forecast: ¥85.0bn ➡ ¥10.0bn) ✓ Decreased due to negative time-lag arising from crude oil price decline ✓ Export volume decreased partly due to decreased export margin for gasoline ✓ Revised downward, also due to an increase in procurement as well as imp
Slide 21: Segment Information
Segment Information [Power/Renewable Energy] +¥8.0bn (11/8 forecast: -¥9.0bn ➡ -¥1.0bn) ✓ Power business: Revised upward due to progress in efforts focused on internal power supply/sales ✓ ES business: No change in forecasts [Oil E&P] +¥2.0bn (11/8 forecast: ¥29.0bn ➡ ¥31.0bn) ✓ Revised upward to re
Slide 22: Reference Materials
€& idemitsu mReference Materials # © Idemitsu Kosan Co, Ltd. All Rights Fi 22
Slide 23: Topics Affecting Progress on the Medium-term Plan (1/3)
Topics Affecting Progress on Progress on the Medium-term Plan (1/3) the Medium-term Plan ◼ Commenced study for the production and export of green ammonia at Abbot Point Port, Australia (Resources/initiatives towards carbon neutrality) ✓ Aimed at manufacturing (500,000 tons/year), storing, and export
Slide 24: Topics Affecting Progress on the Medium-term Plan (2/3)
Topics Affecting Progress on Progress on the Medium-term Plan (2/3) the Medium-term Plan ◼ Idemitsu and Toray creating Japan’s first biomass ABS resin supply chain (Basic chemicals/initiatives towards carbon neutrality) ✓ Aiming to use Idemitsu’s styrene monomer derived from biomass naphtha to manuf
Slide 25: Topics Affecting Progress on the Medium-term Plan (3/3)
Topics Affecting Progress on Progress on the Medium-term Plan (3/3) the Medium-term Plan ◼ Transfer of interest in Ensham Coal Mine, Australia (Resources/structural reforms, enhancing capital efficiency) ✓ Sold Ensham Coal Mine as a part of structural reforms in the coal business, gains and losses f
Slide 26: Financial Results
Financial Results Financial Results [¥ billions] ◼ Net Sales by segment FY2021 3Q FY2022 3Q Change Petroleum 3,604.8 5,668.5 +2,063.7 +57.3% Basic Chemicals 396.3 514.0 +117.7 +29.7% Functional Materials 302.7 381.2 +78.5 +25.9% Power and Renewable Energy 92.4 148.0 +55.7 +60.3% Resources* 246.8 495
Slide 27: Financial Results
Financial Results Financial Results ◼ Quarterly segment income (cumulative, exc. inventory impact) [¥ billions] FY2021 FY2022 1Q 2Q 3Q 4Q 1Q 2Q 3Q Petroleum 29.6 45.1 73.7 136.5 57.4 61.1 1.2 Equity income 6.0 8.6 12.4 9.2 7.0 12.4 12.8 Basic Chemicals 6.7 10.9 7.6 8.2 8.1 14.2 11.4 Equity income 0.
Slide 28: Financial Results
Financial Results Financial Results ◼ Quarterly segment income (Q on Q, exc. inventory impact) [¥ billions] FY2021 FY2022 1Q 2Q 3Q 4Q 1Q 2Q 3Q Petroleum 29.6 15.4 28.6 62.8 57.4 3.7 (59.9) Equity income 6.0 2.6 3.8 (3.2) 7.0 5.4 0.4 Basic Chemicals 6.7 4.2 (3.3) 0.5 8.1 6.1 (2.8) Equity income 0.1 0
Slide 29: Sensitivity
Financial Results Sensitivity ◼ Major items affecting performance by changes in assumptions (FY2022 4Q) Revised Income Assumption assumption Range of Segment impact Contents Items （from fluctuation (¥ billions) Jan. ） Refining fuel cost, Crude oil price 80.0$/bbl ±10$/bbl ±3.0 time-lag Singapore Exc
Slide 30: Sales Volume
Volume Sales Volume ◼ Petroleum [thousand KL,％] FY 2021 3Q FY 2022 3Q Change Gasoline 9,743 9,902 +159 +1.6% Naphtha 176 288 +113 +64.1% Jet Fuel 1,279 1,751 +472 +36.9% Kerosene 2,062 2,092 +29 +1.4% Diesel Oil 7,482 7,788 +306 +4.1% Heavy Fuel Oil A 2,216 2,288 +72 +3.3% Heavy Fuel Oil C 1,741 1,9
Slide 31: Sales Volume
Volume Sales Volume ◼ Basic Chemicals [kt,%] FY 2021 3Q FY 2022 3Q Change Basic Chemicals 2,735 2,548 (187) (6.9%) ◼ Functional Materials [KKL,kt,%] FY 2021 3Q FY 2022 3Q Change Lubricants 880 871 (9) (1.1%) Performance Chemicals 565 494 (70) (12.5%) *Lubricants include sales overseas ◼ Power/Renewa
Slide 32: Production Volume
Volume Production Volume ◼ Resources (Oil E&P) [KBOED,%] FY 2021 3Q FY 2022 3Q Change Norway 25.8 15.3 (10.5) (40.7%) Vietnam 11.7 17.9 +6.2 +52.5% Total('000BOED) 37.5 33.1 (4.3) (11.5%) Total('000BOE) 10,231 9,050 (1,182) (11.5%) *The numbers reflect our rights and ownership ratios based on our eq
Slide 33: Sales Volume (Forecasts)
Appendix Sales Volume(Forecasts) (volume data) ◼ Petroleum [KKL,％] 11/8 Revised Change Forecast Forecast Gasoline 12,960 12,890 (70) (0.5%) Naphtha 320 350 +30 +9.4% Jet fuel 2,280 2,310 +30 +1.3% Kerosene 3,900 3,890 (10) (0.3%) Diesel Oil 10,310 10,320 +10 +0.1% Heavy Fuel Oil A 3,290 3,330 +40 +1
Slide 34: Sales Volume (Forecast)
Appendix Sales Volume(Forecast) (volume data) ◼ Basic Chemicals [kt,%] 11/8 Revised Forecast Forecast Change Basic Chemicals 3,760 3,690 (70) (1.9%) ◼ Functional Materials [KKL,kt,%] 11/8 Revised Forecast Forecast Change Lubricants* 1,210 1,180 (30) (2.5%) Performance Chemicals 720 680 (40) (5.6%) *
Slide 35: Production Volume (Forecasts)
Appendix Production Volume(Forecasts) (volume data) ◼ Resources (Oil E&P) [KBOED,%] 11/8 Revised Change Forecast Forecast Norway 14.8 14.9 +0.1 +0.9% Vietnam 16.3 17.2 +1.0 +6.0% Total('000BOED) 31.0 32.1 +1.1 +3.6% Total('000BOE) 11,330 11,730 +400 +3.5% *The numbers reflect our rights and ownershi
Slide 36: 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 36
Slide 37: 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 37
Slide 38: 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 38
Slide 39: 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 40 140 35 30 120 25 100 20 80 15 60 10 40 5 Spread 20 Dubai 0 Gasoline 0 -5 Apr-17 Apr-18 Apr-19 Apr-20 Apr-21 Apr-22 39
Slide 40: 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 70 160 60 140 50 120 100 40 80 30 60 20 40 Spread 10 20 Dubai Diesel Oil 0 0 Apr-17 Apr-18 Apr-19 Apr-20 Apr-21 Apr-22 40
Slide 41: 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 41
Slide 42: 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 42
Slide 43: Operational Data
Appendix Operational Data (Operational data) ◼ Refineries Utilization FY2022 FY2017 FY2018 FY2019 FY2020 FY2021 3Q 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 3Q Idemitsu 3,545 3,501 3,446 3,42
Slide 44: 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 45: 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 46: 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 47: 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 48: 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 49: 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 50: 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 51: 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 52: 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 53: 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