Idemitsu Kosan : Presentation on Results for FY2025

Idemitsu Kosan Co.,Ltd.

• Response to the situation in the Middle East

• Results for FY2025

• Forecasts for FY2026

• Topics

• Reference

  • Income and Expenses Structure of Petroleum Segment

  • Financial results

  • Volume

  • Crude/product price and operation

  • Business overview

    
    
    
    • Response to the situation in the Middle East
• Basic Policy in this situation

  Stable supply of oil and chemical related products in domestic market is our first priority

• Procurement Procure crude oil and naphtha from around the world including outside of the Middle East
• Production Maintain stable operation of refineries and other plants
• Sales Domestic sales is given priority until the situation in Middle East can be forecasted Proceed transferring additional costs for stable supply to the sales price

  Proceed every measures for stable supply of oil and chemical related products

4

idemitsu Copyright @ ldemit9u Ko9an Co., Ltd. All Rig ht9 Reserved

• Results for FY2025 (exc. Inventory impact) (Billion Yen)

  • Operating + equity income increased by 29.4 Billion Yen, primarily due to positive time-lag resulting from sharp oil rise in Mar and improving in Power and Renewables segment, despite falling coal prices

  • Time-lag impact is +96.7 Billion Yen, vs FY2024

FY2025

11/11

Forecast

Results

244.1 192.3

175.0 145.0

Operating + Equity Income

Net Income

• Shareholder returns

  • Dividend: ¥36/share (¥18/share both interim and FY end)

  • Share buyback：¥25.0 billion buyback has been decided on May 12

  • The total amount of dividends and share buybacks decided on Nov and May represents over 50% of total shareholder returns

  
  
  

  [USD/bbl]

  FY2025 FY2024

130.0

125.0

120.0

115.0

Dubai Crude Oil Price

[USD/ton]

150.0

140.0

Australian Coal Spot Price

140.3

[JPY/USD]

160.0

158.0

156.0155.9

Exchange Rate (USD)

156.9

110.0

105.0

100.0

95.0

130.0

120.0

135.6

125.8

137.7

154.0

152.0

150.0

149.4

154.1

152.4

152.6

90.0

85.0

80.0

75.0

85.3

78.3

86.3

110.0

76.9

104.6

100.5

108.7

107.9

148.0

146.0

144.0

147.5

144.6

70.0

65.0

60.0

70.1

66.9

73.6

63.8

100.0

90.0

142.0

140.0

4 5 6 7 8 9 10 11 12 1 2 3

FY24：78.5 USD/bbl FY25：71.8 USD/bbl

1 2 3 4 5 6 7 8 9 10 11 12

FY24：134.8 USD/ton FY25：105.4 USD/ton

4 5 6 7 8 9 10 11 12 1 2 3

FY24：152.6 JPY/USD FY25：150.9 JPY/USD

• Crude Oil/Coal/Exchange Rate

  [USD/bbl, USD/ton, JPY/USD]

  	FY2024	FY2025	Change
  Crude Oil (Dubai)	78.5	71.8	(6.7)	(8.5%)
  Australian Coal Spot Price*	134.8	105.4	(29.4)	(21.8%)
  Exchange Rate (TTM)	152.6	150.7	(1.9)	(1.2%)

  *Australian coal spot prices are averages based on the calendar year (Jan-Dec).

• Consolidated Income Statement(Summary)

  [¥ billions]

  	FY2024	FY2025	Change
  Net Sales	9,190.2	8,105.9	(1,084.3)	(11.8%)
  Operating Income	162.2	212.2	+50.0	+30.8%
  Inventory impact	(29.9)	(29.4)	+0.5	-
  Equity Income	22.6	2.5	(20.1)	(88.9%)
  Operating Income + Equity Income	184.8	214.7	+29.9	+16.2%
  Excluding inventory impact	214.7	244.1	+29.4	+13.7%
  Ordinary Income	214.8	229.6	+14.8	+6.9%
  Extraordinary Income/Losses	(56.4)	(7.5)	+48.9	-
  Net Income Attributable to Owners of the Parent	104.1	171.9	+67.8	+65.2%
  Excluding inventory impact	124.8	192.3	+67.5	+54.1%

  *Gross average method of inventory valuation

  *Inventory impact represents the impact of inventory valuation and the reduction in book value of inventory assets 7

  
  
  

• Operating ＋ Equity Income (exc. inventory impact, y-o-y)

  Basic Chemicals

  Functional Materials

  Power and Renewables

  Resources (44.2)

  [¥ billions]

  Petroleum Oil

  214.7

  55.1 1.1 5.2 10.5

  E&P

  (4.6)

  Coal

  (39.6)

  1.7 244.1

  Others

  29.4

FY 2024 FY 2025

• Factors Affecting Operating + Equity Income (exc. inventory impact, y-o-y) [¥ billions]

  	FY2024	FY2025	Change	Factors（exc. inventory impacts）
  Petroleum	152.0	207.1	+55.1	+：Time-lag 96.7 [previous year (18.5)→this year +78.2], Export +44.9[volume +3.2, price +41.6] ()：Domestic margin (25.8), Decline sales volume (16.2) Cost increase due to shutdown maintenance (20.7) Cost increase in import and domestic procurement etc. (23.7)
  Basic Chemicals	(8.0)	(6.8)	+1.1	+：Time-lag +10.8 [previous year +3.2→this year +14.0] Volume +3.0, Costs etc. +5.1 ()：Margin (17.8) [PX,MX (1.1), SM etc. (16.8)]
  Functional Materials	28.2	33.4	+5.2	+：Lubricants [favorable in overseas business], Agri-life[addition of Agro-Kanesho to the group] etc.
  Power and Renewables	(12.3)	(1.8)	+10.5	+：Power [reversal of equipment problems in last year etc.]
  Resources*	77.4	33.1	(44.2)
  Oil E&P	18.7	14.0	(4.6)	+：Operational costs ()：Price, Volume
  Coal	58.7	19.1	(39.6)	+：Exchange rate +2.6 ()：Price (36.0), Costs (3.5) , Volume (2.7)
  Others	(22.7)	(20.9)	+1.7
  Total	214.7	244.1	+29.4

  *Fiscal year for IIN in Oil E&P and Coal included in the Resources Segment end in Dec.

  
  
  

  [¥ billions]

  	3/31/2025	3/31/2026	Change		3/31/2022	3/31/2026	Change
  Cash and Deposits	165.8	212.3	46.5	Total Current Liabilities	2,097.4	2,351.4	254.0
  Receivables, Inventory, etc.	2,484.1	2,753.4	269.3	Total Fixed Liabilities	940.5	1,026.3	85.8
  Total Current Assets	2,649.9	2,965.7	315.8	Total Liabilities	3,037.9	3,377.7	339.8
  Tangible Fixed Assets	1,374.0	1,523.5	149.5	Shareholders' Equity and Other Comprehensive Income	1,720.4	1,918.1	197.7
  Other Fixed Assets	751.7	839.6	87.9	Noncontrolling Interests	17.3	33.0	15.6
  Total Fixed Assets	2,125.7	2,363.1	237.4	Total Net Assets	1,737.7	1,951.1	213.4
  Total Assets	4,775.6	5,328.8	553.2	Total Liabilities and Net Assets	4,775.6	5,328.8	553.2

  Net D/E ratio	0.62	0.62	0.00
  Net Interest- bearing debt	1,071.2	1,188.8	+117.6
  Equity ratio	36.0%	36.0%	0.0%

  
  
  

  [¥ billions]

  Cash Flow from Operating Activities 392.4
  	Net Income before tax 222.1 Depreciation Expense 105.0 Change in Working Capital 123.0 Other (57.7)

  Cash Flow from Investing Activities (291.6)
  	Purchase of tangible fixed assets (154.9) Other (136.7)

  Cash Flow from Financing Activities (104.9)
  	Change in borrowings (61.1) Dividend payments and share buyback (46.5) Other 2.7

  Translation gains/losses 10.3

  Change in cash and deposits 6.2

  Cash and Cash Equivalents 157.1

Investments

• Investment expenditures were ¥108.2 billion below the November forecast, mainly due to delayed payment timing for certain major projects, despite steady progress in investment decision-making

  [¥ billion]

  		11/11 Forecast FY2025	FY2025 Results	Change
  	CN	58.0	40.2	(17.8)
  	Growth	160.0	90.4	(69.6)
  Strategic		218.0	130.6	(87.4)
  Maintenance		115.0	84.1	(30.9)
  Total		333.0	214.7	(108.2)

  ※Amount based on expenditures

  
  
  
  
  

  • Forecasts for FY2026

  13

  idemitsu Copyright @ ldemit9u Ko9an Co., Ltd. All Rig ht9 Reserved

• Main assumptions
  • FY2026 forecasts are based on the assumptions below, despite the difficulty in predicting the Middle East situation

    • The Strait of Hormuz will be open to navigate from 2Q onward, with the crude oil supply-demand balance gradually normalizing

      Crude oil prices are assumed to remain at around $80/bbl until December due to damage to production facilities in the Middle East, declining in 4Q to pre-Middle East levels

      	1Q	2Q	3Q	4Q	FY
      Dubai crude oil price （$/bbl)	100.0	80.0	80.0	65.0	81.3

      The supply-demand balance in Asia is expected to recover from 2Q onward

      Domestic margin is predicted the same level as FY2025 excluding time-lag

      (excluding transferring additional cost for maintaining stable supply)

      Time-lag is the main effects for the profits by the Middle East situation

      FY25：positive time-lag happened

      FY26：negative time-lag will happen when crude oil price decline

• Adoption of IFRS

  • IFRS will be adopted from FY2026

    [FY2026-]

    Income before tax excluding finance costs

• In connection with the adoption of IFRS, segment profit will be changed to "income before tax excluding finance costs."

  [-FY2025]

  Operating + Equity Income

• FY2026 forecasts excl. inventory impact (¥ billions)

  • Negative time-lag will happen in FY2026

    due to decline crude oil price

  • Profits is stable excluding time-lag

• Shareholder returns

  *Due to changes in accounting standards resulting from IFRS adoption and a change in the definition of segment profit, a direct comparison with the previous year is not possible

  • Total return ratio will be over 50% during FY2026-FY2030

  • FY2026 dividends forecasts：¥36/share（¥18/share interim and year end）

  • A progressive dividend will be introduced from the FY2026

  
  
  
• Net income in FY2026 forecast excluding time-lag is same level as FY2027 in medium term plan and ROE 12% in FY2027 is possible target

  Time-lag

  (Petroleum and Basic Chemicals)

  ROE* 12.5%

  ROE* 12.0%

  [¥ billion]

  89.0 179.0 172.0

  ROE* 6.1%

  90.0

  FY26

  forecasts

  FY26

  forecasts excl. time-lag

  FY27

  Medium-term Plan

  ＊:including changing Equity in connection with voluntary adoption of IFRS 16

  
  
  

• Crude Oil/Coal/Exchange Rate [USD/bbl, USD/ton, JPY/USD]

  	FY2025 Results	FY2026 Forecasts	Change
  Crude Oil (Dubai)	71.8	81.3	+9.5	+13.2%
  Australian Coal Spot Price *	105.4	126.1	+20.7	+19.6%
  Exchange Rate (TTM)	150.7	151.3	+0.6	+0.4%

  *Australian coal spot prices are averages based on the calendar year (Jan-Dec).

• Consolidated Income Statement(Summary) [¥ billions]

  	FY2025 Results (Japan GAAP)	FY2026 Forecasts (IFRS)
  Operating Income + Equity Income Excluding inventory impact	214.7	-
  	244.1
  Income before tax, excluding finance costs Excluding inventory impact	-	120.0 140.0
  Net Income Attributable to Owners of the Parent Excluding inventory impact	171.9 192.3	75.0 90.0

  *Due to changes in accounting standards resulting from the voluntary adoption of IFRS and a change in the definition of segment profit, a direct comparison with the previous year is not possible.

  *Gross average method of inventory valuation

  *"Inventory impact" represents the impact of inventory valuation and the reduction in book value of inventory assets 17

  
  
  

• Segment Profit (excl. Inventory impact)

[¥ billions]

*Due to changes in accounting standards resulting from the voluntary adoption of IFRS and a change in the definition of segment profit, a direct comparison with the previous year is not possible.

18

• Segment Profit

  Time-lag [¥ billions]

  Petroleum FY2025 78.2 → FY2026 (111.5)

  Basic Chemicals FY2025 14.0 → FY2026 (16.4)

244.1

Petroleum

Time-lag

Resources [13.3]

Changing Accounting Standard

[¥ billions]

Others

67.5

Basic Chemicals

Time-lag Others

Power and Renewables

Oil E&P

Others

Coal

25.8 140.0

(189.7)

(30.4)

8.1

Functional

Materials

(1.4)

2.0 3.9 9.4 0.9

FY2025

Operating + Equity Income

*Bitumen transferred from Functional Materials to Petroleum from FY2026

FY2026

Income before tax, excluding finance costs

19

• Major items affecting income before tax by changes in assumptions

• Impact of the fluctuation is +¥16.0 Billions excluding inventory impact and

+¥101.0 Billions including inventory impact in the situation of rising Crude oil price by 10$/bbl and changing exchange rate by +5¥/$ through FY2026.

*Time-lag and Inventory Impact are affected by assumption in 4Q, therefore the impact is fluctuation of assumption in 4Q

* In the petroleum segment, only performance impacts on products made in domestic refineries are shown. In addition to the above, income will also be affected by sales of overseas affiliates

20

Balance Sheet Impact of IFRS Adoption

• With the adoption of IFRS, liabilities increase by approx. ¥260 billion, and total equity decreases by approx. ¥430 billion

• As this impact is the result of a change in accounting standards, adjustments to the balance sheet will be made in line with IFRS standards and there will be no impact on PL

Key changes

Liabilities

Total equity

• Recognition of lease liabilities +¥260 bn, etc.

• Review of land valuation: -¥320 bn

  (Mainly the impact of changing the book value of land that was revalued in the past based on the Act on Revaluation of Land)

• Recognition of a provision for the NSRP outstanding completion guarantee balance: -¥110 bn

  (Under Japan GAAP, an impairment loss on receivables has already been recorded based on the business value assessment of NSRP. Recording an equity-method investment loss would result in double-counting of losses and was therefore considered unnecessary. Under IFRS, in addition to the impairment loss on receivables, recording an equity-method investment loss is also required. However, since loss recognition is limited to the total of investments, long-term loans, and debt guarantees, an additional provision is recorded for the outstanding completion guarantee balance that was not provided for under Japan GAAP)

• Goodwill impairment at the time of the integration with Showa Shell Sekiyu: -¥90 bn, etc.

• Accounting change for periodic repair expenses, etc.: +¥90 bn

  Start of FY2025 (Japan GAAP)

  Start of FY2025 (IFRS)

  -¥430 bn vs. J-GAAP

  *：IFRS-based Balance Sheet as of the end of FY25 has not been finalized 21

  Total assets

  Approx.

  ¥5,330 bn

  Liabilities

  Approx.

  ¥3,380 bn

  Total equity

  Approx.

  ¥1,950 bn

  Total assets

  Approx.

  ¥5,160 bn

  Liabilities

  Approx.

  ¥3,640 bn

  Total equity

  Approx.

  ¥1,520 bn

  
  
  

  	3/31/2027		3/31/2027
  Current Assets	2,950	Liabilities	3,730
  Fixed Assets	2,250	Net Assets	1,470
  Assets	5,200	Total Liabilities and Net Assets	5,200

  Cash Flow from Operating Activities 210.0
  	Net Income before tax 104.0 Depreciation Expense 156.0 Other (50.0)

  Cash Flow from Investing Activities (255.0)
  	Investment expenditure (265.0) Other 10.0

  Cash Flow from Financing Activities		(36.0)
  	Dividend payments and share buyback	(94.0)
  	Change in borrowings etc.	58.0
  Cash and Cash Equivalents		(81.0)

  Net D/E ratio	1.10
  Net Interest-bearing debt	1,720
  Equity ratio	28%

  [¥ billions]

  
  
  

  • Investment expenditures forecast is ¥265.0 Billions

  • Investment categories will be revised from FY2026

    Maintenance investment is ¥123.0 Billion, mainly included in GRIT and Business platform

    [¥ billions]

    	FY2026 Forecast	2026-2030 Mid-term Plan
    GRIT	127.0	830.0
    GROWTH・CNX	123.0	810.0
    Business platform	15.0	160.0
    Total	265.0	1,800.0

    ※Amount based on expenditures

    
    
    
    
    

    • Topics

      24

      idemitsu Copyright @ ldemit9u Ko9an Co., Ltd. All Rig ht9 Reserved

  • Decision Taken to Invest in MidOcean Energy for Full-Scale Entry into the LNG Business

    Capturing business opportunities in growth sectors through strategic partnerships

    • Decided to make an investment of USD 500 million in MidOcean Energy a liquefied natural gas (LNG) company, established and managed by EIG, a leading institutional investor in the global energy and infrastructure sectors, to invest globally in LNG projects

    • Through the establishment of a strategic partnership with MidOcean Energy, we aim to secure business opportunities

      in the LNG sector while continuing its efforts to further enhance the stable supply of energy

      （Link to our disclosure document） https://www.idemitsu.com/jp/news/2025/260317_en.pdf

  • Mitsui Chemicals, Idemitsu Kosan, and Sumitomo Chemical Receive Japan Fair Trade Commission Clearance for the Integration of Sumitomo Chemical's PP and

    LLDPE*1 Businesses into Prime Polymer

    *1：Linear Low-Density Polyethylene

    • Notice has been received from the Japan Fair Trade Commission that it will not issue a cease-and-desist order regarding the business Integration

    • Business Integration is scheduled to be implemented after the completion of overseas merger reviews

      （Link to our disclosure document） https://www.idemitsu.com/jp/news/2026/260424_2_en.pdf

  • Medium-term Plan has been announced on May 12

    （Link to our website） https://www.idemitsu.com/en/company/managementplan/index.html

    
    
    

  • Situation of Nghi Son Refinery in Vietnam

    • For FY 2025, it is continuing high utilization rates and profitability at the operating level. However, due to significant interest burden, we anticipate a net loss

    • Following the Middle East situation, necessary measures have been implemented in coordination with the Japanese government, relevant authorities in Japan and Vietnam, and other sponsors, based on a request from the Government of Vietnam

    • As for the sponsors loan final discussions among sponsors are underway to reach a decision within FY 2026 on interest reduction measures such as shifting to simple interest

    • No negative consolidated PL impact is expected in 2026 due to due to the provisions for doubtful accounts in prior years and continuous high utilization

      ※NSRP will also pursue measures to improve its financial position, including diversifying crude oil procurement sources, securing power supply from external sources, and selling fuel for self-generation, aiming to achieve a net profit around 2030.

  • Selected as a "Nadeshiko Brand" company for the fourth consecutive year

    • Listed companies that actively promote female advancement, selected jointly by METI and the TSE

      （Link to our disclosure document, Japanese only） https://www.idemitsu.com/jp/news/2025/260324.pdf

      
      
      

  • Commercial operation begins for an oil-conversion chemical recycling facility contributing to the recycling of used plastics

    • Oil-chemical recycling facility, constructed by Chemical Recycle Japan Co. Ltd. that is Group company of Idemitsu Kosan, began commercial operation on April 27

      （Link to our disclosure document, Japanese only） https://www.idemitsu.com/jp/news/2026/260428.pdf

  • Idemitsu to Establish Bench Manufacturing Plant for Space-Grade CIGS Solar Cells; Project Selected for JAXA's "Space Strategy Fund"

• Decided to invest in the establishment of a bench manufacturing plant for space-grade CIGS*1 solar cells at its research and development base within Advanced Technology Research Laboratories in Sodegaura, Chiba Prefecture, with operations scheduled to begin in 2027

• Idemitsu's technology development initiative for space-grade CIGS solar cells have been selected as a project under the "Space Strategy Fund"*2 administered by the Japan Aerospace Exploration Agency (JAXA)

*1 CIGS: A compound semiconductor material composed of copper (Cu), indium (In), gallium (Ga), and selenium (Se)

*2 Space Strategy Fund: A fund established by JAXA to provide mid- to long-term support for technology development and commercialization initiatives led by private companies, universities, and other organizations in Japan's space sector.

（Link to our disclosure document） https://www.idemitsu.com/jp/information/2026/260422_en.pdf

• Reference

  28

  idemitsu Copyright @ ldemit9u Ko9an Co., Ltd. All Rig ht9 Reserved

  • Construction has started for Large Pilot Facility for Solid Electrolytes, a key material for All-Solid-State Battery

  • The capacity will be several hundred tons per year. We will accelerate improvement of the performance of solid electrolyte and development of mass production technology for commercial production by 2027-2028

（Link to our disclosure document） https://www.idemitsu.com/jp/news/2025/260129_en.pdf

CG image of completed large pilot facility (The blue frame indicates the facility.)

Crude oil purchase

Delivery from Middle East Approximately 1months

Sales

Refining ◆ domestic

Point➀time-lag

Rise in crude oil price

:positive

Drop in crude oil price

:negative

Crude oil price as of loading at Middle East

Point➁sales margin

Sales Price

Refer to current crude price

Crude cost

Based on crude oil price when it is loaded at Middle East

(Sales price minus Crude price)

Robust Margin

＝Stable profit

Crude oil price as of sales timing

Product purchase

Point➂Utilization

Improving utilization＝positive due to increasing export volume or decreasing

product purchase volume

Export

Surplus amount

Production

【Price】 【Volume】

Example) impact in Apr

Time-lag Inventory impacts

Cost excluding inventory

Arriving

this month

Stockpile

（close to actual payment）

Cost including inventory

（cost in financial statement）

Costs：based on crude oil price in Mar( Sales Price：refer to crude oil price in Apr

Crude oil price variance between Apr and Mar is time-lag

Rise in crude oil price：positive impact

Drop in crude oil price：negative impact

Cost excluding inventory：crude arriving in Apr Cost including inventory：crude including stockpile before Mar

Variance between cost excluding inventory and cost including inventory is inventory impacts

Rise in crude oil price：positive inventory impact

Drop in crude oil price：negative inventory impact

• Refinery Utilization Rates（BSD*1）

  95%

• Four Key Measures

for Stable and Safe Operations

1. Enhancing Safety Management

   • Strengthening the implementation of process safety

     90%

     85%

     80%

     75%

     70%

     85%

     Current FY

     Last FY

     78%

     92%

     78%

     92%

     83%

     82%

     87%

     86％

     82％

     management

2. Enhancing Equipment Management

   • Ensuring equipment integrity through damage factor review

   • Improving equipment reliability through critical equipment review

3. Enhancing Operational Management

   • Deepening HR aspects through strengthening education and training

   • Improving on-site responsiveness through enhanced OJT training, emergency response drills, etc.

4. Promoting Digital Technology

   • Utilizing centralized data, operational efficiency, and

     1Q 2Q 3Q 4Q

     advanced capabilities through our proprietary maintenance support system and CDF*2 utilization

     • Through the implementation of the four key measures, the utilization rate for current FY improved compared to last FY

*1 BSD: exc. regular maintenances，*2 CDF：Cognite Data Fusion 32

[JPY]

[x]

Financial Results

33

1,000

April-26

1,500

Stock Price (Monthly average)

2,000

1.20

1.00

0.80

0.60

0.40

0.20

0.00

April-22 October-22 April-23 October-23 April-24 October-24

April-25

October-25

500

0

April-22

October-22

April-23

October-23

April-24

October-24

April-25

October-25

April-26

[thousand KL,％]

*Export volume forecast will be announced when it becomes possible to conduct a reasonable assessment of the potential business impact of the situation in the Middle East