INPEX (1605) Q2 2024 earnings summary

Executive summary

• Interim profit attributable to owners of parent reached JPY 212.5 billion for January–June 2024, supported by stable oil prices, a weak yen, and strong financial performance initiatives.

• Full-year net income forecast is JPY 360 billion, up 11.9% year-over-year, reflecting updated assumptions of $80/bbl Brent oil and JPY 148/USD.

• Achieved record-high shareholder returns with a JPY 86 per share dividend and JPY 130 billion in share buybacks.

• Enhanced focus on sustainable growth, capital efficiency, and net zero businesses, including renewables, hydrogen, and CCS.

• Despite recent market volatility and higher costs, earnings are expected to exceed last year’s level.

Financial highlights

• Revenue for H1 2024 rose 10.4% year-over-year to JPY 1,190.8 billion, driven by higher oil prices and yen depreciation, despite lower natural gas prices.

• Operating profit increased 15.3% to JPY 700.1 billion, but profit attributable to owners of parent declined 14.5% year-over-year to JPY 212.5 billion due to higher income tax and exploration expenses.

• Basic EPS for 2Q FY2024 was JPY 169.26, down 11.0% year-over-year.

• Total assets rose to JPY 7.77 trillion, largely due to FX translation effects.

• Cash and cash equivalents at period end were JPY 233.2 billion, up JPY 32.0 billion from year-end 2023.

Outlook and guidance

• Full-year 2024 profit forecast maintained at JPY 360 billion, with revenue revised up to JPY 2,254 billion (+4.1% YoY), and operating profit to JPY 1,249 billion (+12.1%).

• Dividend forecast for 2024 increased to JPY 86 per share; total payout ratio expected at 65%.

• Share buyback program increased to JPY 130 billion, both dividend and buyback at record levels.

• Brent oil price assumption for full year is $80/bbl; exchange rate assumption is JPY 148/USD.

• Free cash flow for FY2024 revised up to JPY 518 billion.