ENEOS (5020) Q2 2026 earnings summary

Executive summary

• Operating profit for H1 FY2025 was JPY 166.7 billion, including a negative inventory valuation impact of JPY 106.8 billion; excluding this, operating profit rose to JPY 273.5 billion, up JPY 65.3 billion year-on-year.

• Profits rose due to improved petroleum product margins and a one-time gain from the sale of the maritime transportation business, offsetting declines in oil and natural gas E&P from lower prices and yen appreciation.

• Group restructuring and efficiency initiatives are underway, including consolidation of subsidiaries and integration of business units to enhance governance and profitability.

• AI and digital transformation initiatives are being implemented to optimize operations and maintenance, with an AI Innovation Department established in June 2025.

• Profit attributable to owners of the parent was JPY 64.75 billion in H1 FY2025, with basic profit per share at JPY 24.07.

Financial highlights

• H1 FY2025 revenue fell 10% year-over-year to JPY 5,691.9 billion; operating profit excluding inventory valuation increased 31% to JPY 273.5 billion.

• Oil and natural gas E&P operating profit declined by JPY 19.4 billion year-on-year to JPY 27.3 billion due to lower resource prices and yen appreciation.

• High-performance materials business operating profit rose by JPY 0.3 billion to JPY 9.4 billion, while electricity business profit increased by JPY 4.5 billion to JPY 18.7 billion.

• Free cash flow for H1 was JPY 211.3 billion; operating cash flow for Q2 was JPY 334.3 billion.

• Inventory valuation loss widened by JPY 44.6 billion year-over-year.

Outlook and guidance

• Full-year FY2025 revenue forecast is JPY 11,400 billion, down JPY 300 billion from prior guidance.

• Full-year operating profit forecast revised down to JPY 290 billion due to lower oil prices impacting inventory valuation.

• Operating profit excluding inventory valuation forecasted at JPY 420 billion, up JPY 10 billion from May; profit attributable to owners of parent (excluding inventory valuation) projected at JPY 225 billion.

• Annual dividend for FY2025 raised to JPY 34 per share, up JPY 4 from May and JPY 8 year-on-year.

• Basic profit per share is forecast at JPY 50.19.