Idemitsu Kosan Co. (5019) investor relations material

Executive summary

• FY2025 saw a significant increase in operating and equity income, driven by positive time-lag effects from oil price rises and improved performance in Power and Renewables, despite lower coal prices.

• Net income attributable to owners rose 65.2% year-over-year, with strong shareholder returns through dividends and a major share buyback.

• Net sales declined 11.8% year-over-year to ¥8,105.9 billion, mainly due to lower crude oil prices in the petroleum segment.

• Comprehensive income surged 124.2% year-over-year to ¥242.9 billion.

• Stable domestic supply was prioritized amid Middle East instability, with diversified procurement and cost transfers to sales prices.

Financial highlights

• Net sales decreased 11.8% year-over-year to ¥8,105.9 billion, but operating income (excl. inventory impact) rose 16.2% to ¥214.7 billion.

• Net income (excl. inventory impact) increased 54.1% to ¥192.3 billion.

• Gross profit increased to ¥754.5 billion from ¥689.4 billion year-over-year.

• Ordinary income was ¥229.6 billion, up 6.9% year-over-year.

• Dividend set at ¥36/share, with a ¥25 billion share buyback, totaling over 50% shareholder return.

Outlook and guidance

• FY2026 forecasts assume crude oil prices at $81.3/bbl and adoption of IFRS, making direct year-over-year comparisons difficult.

• Operating + equity income (excl. inventory impact) forecast at ¥140 billion, net income at ¥90 billion, reflecting a negative time-lag from expected oil price declines.

• For FY2027 (IFRS basis), forecasts: income before tax (excl. financial costs) ¥140.0 billion, net income attributable to owners of the parent (excl. inventory valuation) ¥90.0 billion, and net income attributable to owners of the parent ¥75.0 billion.

• Progressive dividend policy introduced, with a forecasted ¥36/share dividend and total return ratio over 50% through FY2030.

• Assumptions: Dubai crude oil price at $81.3/bbl, FX rate at ¥151.3/USD.