Eneos Holdings, Inc. TSE:5020

ENEOS : Q&A （71KB）（71KB）

Published April 8, 2025 at 7:29 a.m. UTC

Source: MarketScreener

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ENEOS Holdings (5020) FY2024 Earnings Forecast Revision -- Analyst Briefing Q&A
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Date & time: Monday, March 31, 2025 (15:00 - 15:35)
Attendees: 155
Principal questions: Please find below

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－This document contains forward-looking statements. A cautionary statement appears in the endnote.－

Regarding ROE at 10%, it seems to be a high hurdle to achieve this fiscal year, but does your stance remain unchanged in the Fourth Medium-Term Management Plan in aiming for an ROE of 10%?

We have no intention of lowering our ROE target in the next Medium-Term Management Plan and will continue to be committed to the target of 10%. We recognize that capital efficiency is one of our most critical management issues, and we intend to effectively combine profit improvement, carefully selected new investments, and shareholder returns to achieve an ROE of 10%.
Although current conditions make reaching an ROE of 10% challenging, we believe that there is room for profit improvement in our base businesses.
Specifically, this includes the reversal of the negative time lag occurring this fiscal year, the shortening of scheduled maintenance periods, and an improvement in Unplanned Capacity Loss (UCL: the percentage of unplanned refinery shutdowns) leading to higher refinery operating rates. Furthermore, we plan to leverage AI/DX to enhance efficiency in our manufacturing divisions and, ultimately, throughout our entire supply chain. Additionally, we see potential for expansion in the petroleum business, and we believe there are ample opportunities to boost jet fuel sales driven by increased inbound demand as well as to expand our petroleum operations overseas.
We will provide further details on these matters when we announce the next Medium-Term Management Plan in May.

I would like to confirm with you the details of the 165 billion yen decrease in the Petroleum Products Business. Also, please explain the assumptions regarding exchange rate and crude oil price.

The main components of the 165 billion yen decrease in the Petroleum Products Business are a 160 billion yen decrease due to impairment of goodwill, a 36 billion yen increase in petroleum product margins, a 4 billion yen increase in export margins, a 20 billion yen decrease due to time lag, and a 25 billion yen decrease due to the impact of refinery troubles.
We are assuming that a crude oil price of $70 per barrel and an exchange rate of 150 yen per dollar for March, in addition to the actual results up to February.

I understand that from the next fiscal year onward, you will transfer the Metals Business to the Other segment, and that its profits will decrease from the current 100% ownership level to a level where the net profit of JX Metals is multiplied by the ENEOS Holdings' ownership ratio.
Am I correct in my understanding that JX Advanced Metals will achieve profit growth and increase

ROE, starting from the level of profit and loss on the assumption that it will become an equity- method affiliate?

A: Your understanding is correct.

This document contains forward-looking statements. Actual results may differ materially from those expressed or implied by forward-looking statements due to various factors, including but not limited to the following:

macroeconomic conditions and changes in the competitive environment in the energy, resources, or materials industries
revision of laws and tightening of regulations
risk of lawsuits and other legal risks