Slide 1: Presentation on Results for the 2nd Quarter FY2024
Presentation on Results for the 2nd Quarter FY2024 November 12, 2024 Idemitsu Kosan Co.,Ltd.
Slide 2: Table of Contents
Table of Contents ◼ Highlights ◼ Results for the 2Q FY2024 ◼ Progress on the Medium-Term 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 2Q FY2024 Summary
Results for the 2Q FY2024 ◼ Summary ✓ Operating + equity income (segment income) decreased by ¥97.8 billion y-o-y, mainly due to a decrease in export margins and reversal of the inventory impact in the previous FY ✓ Steady progress towards full-year forecasts due to solid domestic margins [¥ billion
Slide 5: Results for the 2Q FY2024
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Slide 6: Topics
Topics ◼ Trends in Petroleum Demand and Sales ✓ Gasoline demand decreased due to less ownership of gasoline-powered vehicles and improved fuel efficiency. Diesel oil demand also decreased due to streamlined logistics ✓ Jet fuel demand has been on a recovery trend since COVID-19 FY2022 FY2023 2Q FY20
Slide 7: Operating Environment
Operating Environment Dubai Crude Australian Coal Exchange Rate [USD/bbl] [USD/ton] [JPY/USD] Oil Price Spot Price (USD) 95.0 360.0 160.0 FY2024 FY2023 330.0 155.9 155.0 90.0 300.0 270.0 150.0 85.3 149.4 85.0 86.7 247.8 148.6 240.0 147.9 83.6 145.0 144.6 210.0 80.0 81.3 78.3 77.8 180.0 140.0 160.7 1
Slide 8: Overview
Overview ◼ Crude Oil/Coal/Exchange Rate [USD/bbl, USD/ton, JPY/USD] 2Q FY2023 2Q FY2024 Change Crude Oil (Dubai) 82.3 81.8 (0.5) (0.6%) Crude Oil (Brent)* 79.8 84.1 +4.3 +5.4% Australian Coal Spot Price* 204.3 130.7 (73.6) (36.0%) Exchange Rate (TTM) 141.0 152.6 +11.6 +8.3% *Brent prices and Austral
Slide 9: Segment Information
Segment Information ◼ Operating ＋ Equity Income [¥ billions] 5/14 full-year 2Q FY2023 2Q FY2024 Change forecasts FY2024 Petroleum 121.7 62.2 (59.6) (48.9%) 102.0 Excluding inventory impact 105.0 62.8 (42.3) (40.2%) 102.0 Basic Chemicals 12.0 3.4 (8.6) (71.6%) 26.0 Functional Materials 13.4 16.0 +2.6
Slide 10: Segment Information: Factors Affecting Income
Segment Information ◼ Factors Affecting Operating + Equity Income (excluding inventory impact, y-o-y) [￥billions] Core products margin (time-lag) Fuel cost, etc. Export Cost, etc. Non-core Power, Volume etc. Vietnam, products etc. margin Volume Price Lubricants Norway etc. Exchange rate, etc. Oil E＆
Slide 11: Segment Information: Petroleum
Segment Information [Petroleum] YoY -¥42.3 bn (2Q FY23：¥105.0 bn 2Q FY24：¥62.8 bn) [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 (YoY) (domestic spot –crude oil) [Thousand KL]
Slide 12: Segment Information: Chemicals, Materials, Power
Segment Information [Basic Chemicals] YoY-¥8.6bn (2Q FY23: ¥12.0bn 2Q FY24: ¥3.4bn) ✓ Decreased as a result of lower sales volume due to equipment troubles. ✓ Product margin deteriorated in total mainly due to PX and MX margin shrinking [USD/ton] Product 2Q FY2023 2Q FY2024 Change Price Margin Price
Slide 13: Segment Information: Oil E&P and Coal
Segment Information [Oil E&P] YoY -¥0.6 bn [Coal] YoY -¥26.5 bn (2Q FY23：¥10.5 bn 2Q FY24：¥9.9 bn) (2Q FY23：¥59.3 bn 2Q FY24：¥32.8 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 14: Balance Sheet
Balance Sheet [¥ billions] 3/31/2024 9/30/2024 Change 3/31/2024 9/30/2024 Change Total Current Cash and Deposits 139.3 31.6 (107.7) Liabilities 2,192.5 1,855.8 (336.7) Receivables, Total Fixed Inventory, etc. 2,777.5 2,500.8 (276.7) Liabilities 1,007.3 947.0 (60.3) Total Current Assets 2,916.8 2,532
Slide 15: Statement of Cash Flows
Statement of Cash Flows [¥ billions] Cash Flow from Operating Activities 221.8 Net Income before tax 130.8 Depreciation Expense 51.9 Change in Working Capital 169.4 Other (130.3) Cash Flow from Investing Activities (47.0) Purchase of tangible fixed assets (35.6) Other (11.4) Cash Flow from Financing
Slide 16: 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 16
Slide 17: Topics related to Progress on the Medium-term Plan (1/3)
Topics related to Progress on the Medium-term Plan (1/3) ◼ Investment in HIF Global with JOGMEC in the e-fuel domain: To accelerate supply chain development for e-fuels such as e-methanol ✓ Co-investment in HIF Global approved as a part of Japan Organization for Metals and Energy Security JOGMEC ’s
Slide 18: Topics related to Progress on the Medium-term Plan (2/3)
Topics related to Progress on the Medium-term Plan (2/3) ◼ KeePer Giken and Idemitsu Kosan agree to form a strategic business alliance: a new car coating and car-wash station with a nationwide footprint ✓ Agreed to form a strategic business alliance with KeePer Giken aimed at creating a new car coat
Slide 19: Topics related to Progress on the Medium-term Plan (3/3)
Topics related to Progress on the Medium-term Plan (3/3) ◼ Basic Design of Large Pilot Facility Begins for Commercialization of solid electrolytes for All-Solid-State Batteries in 2027-2028 ✓ Commenced the basic design of large-scale pilot solid electrolyte equipment in October 2024 ✓ Forecasting pr
Slide 20: Investments
Investments [¥ billions] FY24 FY24 2Q Forecast Results *unchanged from 5/14 announcement CN 21.9 75.0 Growth 16.1 175.0 Strategic 38.0 250.0 Maintenance 29.3 80.0 合計 67.3 330.0 * Amounts based on expenditures [Strategic Investments] ✓ Investment in HIF Global, the world’s leading e-Fuels company is
Slide 21: Reference
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Slide 22: Financial Results: Net Sales by Segment
Financial Results Financial Results ◼ Net Sales by segment [¥ billions] 2Q FY2023 2Q FY2024 Change Petroleum 3,189.1 3,750.7 +561.7 +17.6% Basic Chemicals 280.2 294.6 +14.4 +5.2% Functional Materials 248.4 250.8 +2.5 +1.0% Power and Renewable Energy 72.1 65.5 (6.6) (9.2%) Resources* 233.3 136.0 (97.
Slide 23: Quarterly Segment Income (Cumulative)
Financial Results Financial Results ◼ Quarterly segment income (cumulative, exc. inventory impact) [¥ billions] FY2023 FY2024 1Q 2Q 3Q 4Q 1Q 2Q Petroleum 18.4 105.0 114.1 167.2 47.8 62.8 Equity income 4.9 3.8 6.9 9.9 5.1 10.8 Basic Chemicals (1.4) 12.0 21.4 22.0 7.5 3.4 Equity income (0.6) (1.0) (1.
Slide 24: Quarterly Segment Income (Q on Q)
Financial Results Financial Results ◼ Quarterly segment income (Q on Q, exc. inventory impact) [¥ billions] FY2023 FY2024 1Q 2Q 3Q 4Q 1Q 2Q Petroleum 18.4 86.6 9.0 53.1 47.8 14.9 Equity income 4.9 (1.0) 3.1 3.0 5.1 5.7 Basic Chemicals (1.4) 13.4 9.4 0.7 7.5 (4.1) Equity income (0.6) (0.4) (0.8) (2.2
Slide 25: Sensitivity
Financial Results Sensitivity ◼ Major items affecting operating profit by changes in assumptions (3-4Q) Income Assumptions Range of Index Segment impact Major Factors (FY2024) fluctuation (¥ billions) Crude oil price 85.0$/bbl ±10$/bbl ±26.0 Time-lag, fuel cost Singapore ー ±5$/bbl Petroleum ±19.0 Ex
Slide 26: Sales Volume: Petroleum
Volume Sales Volume ◼ Petroleum [thousand KL,％] 2Q FY2023 2Q FY2024 Change Gasoline 6,537 6,392 (146) (2.2%) Naphtha 192 160 (32) (16.6%) Jet Fuel 1,244 1,247 +3 +0.2% Kerosene 750 665 (85) (11.4%) Diesel Oil 5,028 5,019 (9) (0.2%) Heavy Fuel Oil A 1,368 1,322 (46) (3.3%) Heavy Fuel Oil C 1,159 833
Slide 27: Sales Volume: Chemicals, Materials, Power
Volume Sales Volume ◼ Basic Chemicals [kt,%] 2Q FY2023 2Q FY2024 Change Basic Chemicals 1,617 1,478 (139) (8.6%) ◼ Functional Materials [KKL,kt,%] 2Q FY2023 2Q FY2024 Change Lubricants 565 542 (23) (4.0%) Performance Chemicals 299 242 (57) (19.0%) *Lubricants include sales overseas ◼ Power/Renewable
Slide 28: Production Volume
Volume Production Volume ◼ Resources (Oil E&P) [KBOED,%] 2Q FY2023 2Q FY2024 Change Vietnam 16.8 14.0 (2.8) (16.6%) Norway 14.8 12.9 (1.9) (13.0%) Total('000BOED) 31.6 26.9 (4.7) (14.9%) Total('000BOE) 5,718 4,908 (810) (14.2%) *The numbers reflect our rights and ownership ratios based on our equity
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-19 Apr-20 Apr-21 Apr-22 Apr-23 Apr-24 29
Slide 30: Gasoline-Crude Oil (Domestic)
Product market price Gasoline-Crude Oil(Domestic spot price and spread) [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-19 Apr-20 Apr-21 Apr-22 Apr-23 Apr-24 30
Slide 31: Diesel-Crude Oil (Domestic)
Product market price Diesel-Crude Oil(Domestic spot price and spread) [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-19 Apr-20 Apr-21 Apr-22 Apr-23 Apr-24 31
Slide 32: Gasoline-Crude Oil (Singapore)
Product market price Gasoline-Crude Oil(Singapore spot price and spread) [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-19 Apr-20 Apr-21 Apr-22 Apr-23 Apr-24 32
Slide 33: Diesel-Crude Oil (Singapore)
Product market price Diesel-Crude Oil(Singapore spot price and spread) [Price :USD/bbl] [Spread：USD/bbl] 180 70 160 60 140 50 120 100 40 80 30 60 20 40 Spread Dubai 10 20 Diesel Oil 0 0 Apr-19 Apr-20 Apr-21 Apr-22 Apr-23 Apr-24 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 Apr-24 34
Slide 35: Styrene Monomer-Naphtha
Product market price Styrene Monomer-Naphtha (price and spread) [Price :USD/ton] [Spread：USD/ton] 1,600 800 1,400 700 1,200 600 1,000 500 800 400 600 300 400 200 200 100 SM spread Naptha SM 0 0 Apr-19 Apr-20 Apr-21 Apr-22 Apr-23 Apr-24 35
Slide 36: Operational Data
Operation Operational Data ◼ Refineries Utilization 2Q FY2020 FY2021 FY2022 FY2023 FY2024 68% 78% 77% 83% 78% [73%] *on BCD basis including regular maintenances *Refining operation at Yamaguchi Refinery (120KBD) was terminated in March 2024. The official capacity was changed after July. The adjusted
Slide 37: Forecasts for FY2024
Forecasts for FY2024 (unchanged from the announcement on 5/14) ◼ Crude Oil/Coal/Exchange Rate [USD/bbl, USD/ton, JPY/USD] FY2023 FY2024 Change Crude Oil (Dubai) 82.3 85.0 +2.7 +3.2% Crude Oil (Brent)* 82.6 85.0 +2.4 +2.8% Australian Coal Spot Price* 172.8 125.0 (47.8) (27.7%) Exchange Rate (TTM) 144
Slide 38: Segment Information for FY2024
Segment Information for FY2024 (unchanged from the announcement on 5/14) ◼ Operating ＋ Equity Income [¥ billions] FY2024 FY2023 FY2024 Change (medium- term plan) Petroleum 219.7 102.0 (117.7) (53.6%) 102.0 Excluding inventory impact 167.2 102.0 (65.2) (39.0%) 102.0 Basic Chemicals 22.0 26.0 +3.9 +17
Slide 39: Overview of the Company
Business Overview Overview of the Company FY2023, actual or as of the end of March 2024 ∎ Petroleum Segment ∎ Functional Materials Segment Refining Capacity 825 KBD *1,2) (Lubricants, Performance Chemicals, Electronic Domestic fuel oil sales volume Materials, Bitumen (High Performance Asphalt),
Slide 40: Petroleum Segment
Business Overview Petroleum Segment [KB/D] Refining Operating Company Refinery RH FCC RFCC FLG Equity Ratio Capacity Japan Idemitsu Hokkaido 140 42 33 Kosan Chiba 195 40 45 Aichi 165 60 50 Showa Yokkaichi Yokkaichi 255 45 61 75.0% Sekiyu Toa Oil Keihin 70 42 27 100.0% 825 187 42 189 27 Overseas Nghi
Slide 41: Basic Chemicals Segment
Business Overview Basic Chemicals Segment [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 Tokuyama 0.623 0.214 0.340 Showa Yo
Slide 42: 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 43: 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 44: 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 45: 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 *1,2 [million BOE] 2. Exploration and development of gas in Vietnam and other 150 parts of Southeast Asia to shift to production
Slide 46: 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 47: 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