Idemitsu Kosan Co., Ltd. · TSE:5019
Idemitsu Kosan — Q1 FY2020 Earnings Presentation
31 slides from Idemitsu Kosan's earnings presentation, Aug 6, 2020
Slide 1: Presentation on Results for the 1st Quarter FY2020
Presentation on Results for the 1st Quarter FY2020 August 6, 2020
Slide 2: Summary of Financial Results
Summary of Financial Results Overview Segment earnings decreased significantly year-on-year in the 1st quarter of FY2020 due to inventory impact losses Segment earnings excluding inventory impact also decreased due to an increase in equity losses relating to NSRP and reduced demand for petrole
Slide 3: Key Topics
Key Topics Impact of COVID-19 Pandemic on Idemitsu’s Operations While demand for the 4 core petroleum products has been recovering since June, jet fuel demand has not shown signs of improvement [％] Apr May Jun Apr-Jun 4 Core Products 87.6 85.1 90.7 87.8 JET Fuel 26.3 22.2 22.0 23.5 *Sales growth
Slide 4: Key Topics
Key Topics Inventory Impact 〈Crude Oil Price Trends (Arabian light, USD/bbl)〉 70 68 60 58 50 40 Average price March Inventory 30 37 35 impact Average price Apr - Jun 20 25 19 10 Jun Feb Mar Apr May Jun 2H Recorded inventory impact of 94.4 billion yen from the fall in crude oil prices in FY20 1Q
Slide 5: Operating Environment
Operating Environment Dubai Crude Oil Australian Coal Exchange Rate [USD/bbl] Price [USD/ton] Spot price [JPY/USD] (USD) 80.0 120.0 113.0 67.4 70.0 110.0 112.0 62.1 61.2 60.0 100.0 95.8 111.0 109.9 50.0 90.0 110.0 50.7 80.2 40.0 80.0 109.0 108.8 65.4 67.3 108.9 30.0 70.0 108.0 30.5 67.8 107.3 20.0 6
Slide 6: Overview
Overview Crude Oil / Coal / Exchange Rates [USD/bbl., USD/ton, ¥/USD] FY2019 1Q FY2020 1Q Change Crude Oil (Dubai) 67.4 30.5 (36.9) (54.7%) Crude Oil (Brent)* 63.2 50.3 (12.9) (20.5%) Thermal Coal * 95.8 67.8 (28.0) (29.3%) Exchange Rate (TTM) 109.9 107.6 (2.3) (2.1%) *Brent prices and thermal coa
Slide 7: Segment Information
Segment Information Operating Income + Equity Income [¥ billions] FY2019 1Q FY2020 1Q Change Petroleum 5.2 (103.8) (109.0) － Excluding inventory impact 3.5 (9.4) (12.9) － Basic Chemicals 5.9 0.1 (5.7) (97.6%) Functional Materials 6.4 4.8 (1.7) (25.7%) Power and Renewable Energy 0.8 0.1 (0.8) (92.3
Slide 8: Segment Information
Segment Information Factors Affecting Operating Income + Equity Income (excluding inventory impact, year-on-year) [¥ billions] Oil Exploration Coal and Production (8.5) (4.5) Margin Volume Cost Volume etc. Solar Equity etc. income FX etc. etc. Margin Lubricants etc. Volume FX etc. Pricing Volume P
Slide 9: Segment Information
Segment Information [Petroleum] YoY -¥12.9 bn (FY19 1Q:¥3.5 bn ➡ FY20 1Q:-¥9.4 bn) <Year-on-year Change in Petroleum <Trends in Domestic Petroleum Product sales volume (4 Core Products)> Margins*> *Average of gasoline, diesel oil, kerosene, and heavy oil A margins (domestic spot – crude oil) [Thousa
Slide 10: Segment Information
Segment Information [Basic Chemicals] YoY -¥5.7 bn (FY19 1Q:¥5.9 bn ➡ FY20 1Q:¥0.1 bn) Profits decreased due to reduced product margins, etc. FY19 1Q FY20 1Q PX margin -146$/t （368$/t → 222$/t） MX margin -60$/t （184$/t → 124$/t） SM margin -190$/t（520$/t → 330$/t） [Functional Materials] YoY -¥1.7 b
Slide 11: Segment Information
Segment Information [Oil E&P] YoY -¥4.5 bn [Coal] YoY -¥8.5 bn (FY19 1Q:¥6.7 bn ➡ FY20 1Q:¥2.2 bn (FY19 1Q:¥9.5 bn ➡ FY20 1Q:¥1.0 bn <Crude Oil Production Volume and <Coal Production Volume and Australian Brent Crude Oil Price Trends> Coal Spot Price Trends> [Thousand [USD/bbl] [Thousand [USD/t] BOE
Slide 12: Balance Sheet
Balance Sheet [¥ billions] 3/31/2020 6/30/2020 Change 3/31/2020 6/30/2020 Change Total Current Cash and Deposits 132.2 182.0 49.8 Liabilities 1,648.4 1,531.6 (116.8) Receivables, Total Fixed Inventory,etc. 1,418.1 1,120.2 (297.8) Liabilities 1,038.0 1,031.3 (6.6) Total Current Assets 1,550.3 1,302.2
Slide 13: Reference Materials
€ idemitsu Reference Materials 13
Slide 14: Overview of the Company
Overview of the Company ∎ Petroleum Segment ∎ Functional Materials Segment Refining Capacity 945,000 BD *1) (Lubricants, performance chemicals, electronic Domestic fuel oil sales volume materials, functional asphalt, agricultural- 41 million KL/year biotechnology, solid electrolyte) Number of
Slide 15: Financial Data
Financial Data Net Sales by Segment [¥ billions] FY2019 1Q FY2020 1Q Change Petroleum 1,169.5 757.4 (412.1) (35.2%) Basic Chemicals 113.5 72.8 (40.7) (35.9%) Functional Materials 97.1 81.0 (16.1) (16.6%) Power and Renewable Energy 29.3 29.2 (0.1) (0.2%) Resources* 66.4 41.8 (24.6) (37.0%) Oil Expl
Slide 16: Financial Data FY2020 Guidance (Announced on May 26th)
Financial Data FY2020 Guidance（Announced on May 26th） Crude Oil / Coal / Exchange Rates [USD/bbl., USD/ton, ¥/USD] FY2019 FY2020 Change Crude Oil (Dubai) 60.3 25.0 (35.3) (58.6%) Crude Oil (Brent)* 64.3 30.0 (34.3) (53.4%) Thermal Coal * 77.8 55.0 (22.8) (29.3%) Exchange Rate (TTM) 108.7 105.0 (3.
Slide 17: Financial Data FY2020 Guidance (Announced on May 26th)
Financial Data FY2020 Guidance（Announced on May 26th） Operating Income + Equity Income [¥ billions] FY2019 FY2020 Change Petroleum (109.4) 35.0 144.4 － Excluding inventory impact (20.1) 35.0 55.1 － Basic Chemicals 11.9 0.0 (11.9) (100.0%) Functional Materials 28.4 0.0 (28.4) (100.0%) Power and Ren
Slide 18: Financial Data
Financial Data Quarterly segment income（accumulated、excluding inventory impact） [¥ billions] FY2019 1Q FY2019 2Q FY2019 3Q FY2019 FY2020 1Q Petroleum 3.5 15.4 26.1 (20.1) (9.4) Equity income (2.7) (14.9) (26.0) (32.7) (27.2) Basic Chemicals 5.9 14.3 18.0 11.9 0.1 Equity income 0.4 0.9 1.1 1.6 0.3
Slide 19: Sales and Production
Sales and Production Sales Volume(Petroleum Segment) [Thousand KL,％] FY 2019 1Q FY 2020 1Q Change Gasoline 3,513 2,833 (680) (19.4%) Naphtha 25 92 67 263.1% Jet Fuel 1,293 304 (989) (76.5%) Kerosene 578 657 78 13.5% Diesel Oil 2,665 2,386 (279) (10.5%) Heavy Fuel Oil A 781 740 (41) (5.2%) Heavy Fu
Slide 20: Sales and Production
Sales and Production Sales Volume (Basic Chemicals Segment) [Thousand tons,%] FY 2019 1Q FY 2020 1Q Change Basic Chemicals 1,047 1,092 45 4.3% Sales Volume (Functional Materials Segment) [Thousand KL, Thousand tons,%] FY 2019 1Q FY 2020 1Q Change Lubricants 301 252 (49) (16.3%) Performance Chemi
Slide 21: Sales and Production
Sales and Production Oil E&P – Production Volume, including Gas (Resources Segment) [Thousand BOED,%] FY 2019 1Q FY 2020 1Q Change Norway 24.0 22.0 (2.0) (8.2%) Total('000BOE) 2,156 2,002 (154) (7.1%) *Figures based on interest owned by Idemitsu's resource development subsidiaries Coal – Product
Slide 22: Sensitivity
Sensitivity Impact on FY earnings Items Range Impact on earnings Petroleum (¥4.0 billion) Crude Fuel cost, etc. ¥1.0 billion １$/bbl Inventory impact (¥5.0 billion) Decrease Oil Oil Exploration & Production (¥1.0 billion) Petroleum (¥2.5 billion) Foreign Exchange Fuel cost, etc. ¥0.5 billion １JPY/$
Slide 23: Crude Oil Prices (Dubai and Brent)
Crude Oil Prices (Dubai and Brent) [USD/bbl] 90 Brent 80 Dubai 70 60 50 40 30 20 10 Apr-16 Apr-17 Apr-18 Apr-19 Apr-20 23
Slide 24: Gasoline – Crude Oil (Domestic spot prices and Spreads)
Gasoline – Crude Oil (Domestic spot prices and Spreads) [¥/L] Prices Spreads [¥/L] 80 18 70 16 14 60 12 50 10 40 8 30 6 20 4 Spread 10 Crude oil 2 Gasoline 0 0 Apr-16 Apr-17 Apr-18 Apr-19 Apr-20 24
Slide 25: Diesel Oil – Crude Oil (Domestic spot prices and Spreads)
Diesel Oil – Crude Oil (Domestic spot prices and Spreads) [¥/L] Prices Spreads [¥/L] 80 20 18 70 16 60 14 50 12 40 10 8 30 6 20 Spread 4 10 Crude oil 2 Diesel oil 0 0 Apr-16 Apr-17 Apr-18 Apr-19 Apr-20 25
Slide 26: Gasoline – Crude Oil (Singapore spot prices and Spreads)
Gasoline – Crude Oil (Singapore spot prices and Spreads) [USD/bbl] Prices Spreads [USD/bbl] 100 16 90 14 80 12 70 10 60 8 50 6 40 4 30 2 20 Spread Dubai 0 10 Gasoline 0 -2 Apr-16 Apr-17 Apr-18 Apr-19 Apr-20 26
Slide 27: Diesel Oil – Crude Oil (Singapore Spot prices and Spreads)
Diesel Oil – Crude Oil (Singapore Spot prices and Spreads) [USD/bbl] Prices Spreads [USD/bbl] 100 20 90 18 80 16 70 14 60 12 50 10 40 8 30 6 20 Spread 4 Dubai 10 2 Diesel Oil 0 0 Apr-16 Apr-17 Apr-18 Apr-19 Apr-20 27
Slide 28: Paraxylene, Mixed xylene, Naptha (Prices and Spreads)
Paraxylene, Mixed xylene, Naptha (Prices and Spreads) [USD/ton] Prices Spreads [USD/ton] 1,400 700 PX spread Mx spread Naptha PX 1,200 MX 600 1,000 500 800 400 600 300 400 200 200 100 0 0 Apr-16 Apr-17 Apr-18 Apr-19 Apr-20 28
Slide 29: Styrene Monomer, Naptha (Prices and Spreads)
Styrene Monomer, Naptha (Prices and Spreads) [USD/ton] Prices Spreads [USD/ton] 1,600 1,200 1,400 1,000 1,200 800 1,000 800 600 600 400 400 200 200 SM spread Naptha SM 0 0 Apr-16 Apr-17 Apr-18 Apr-19 Apr-20 29
Slide 30: Operational data
Operational data Refineries Utilization FY 2020 FY 2016 FY 2017 FY 2018 FY 2019 1Q Idemitsu Kosan 88% 88% 88% 87% 70% Former Showa Shell 85% 88% 93% * Utilization rate based on BCD Number of Service Stations FY 2020 FY 2016 FY 2017 FY 2018 FY 2019 1Q Idemitsu Kosan 3,589 3,545 3,501 3,446 3,439
Slide 31: 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