INPEX (1605) Q2 2025 earnings summary

Executive summary

• First half 2025 net profit rose 5.1% year-over-year to ¥223.5 billion, driven by stable Ichthys LNG operations and lower income tax expense, despite revenue and operating profit declines from lower oil prices and yen appreciation.

• Full-year net profit forecast revised upward to ¥370 billion, a ¥70 billion increase from May, reflecting higher oil price and weaker yen assumptions, and would be the third highest on record.

• Launched the 'Profit Boost 500' initiative, targeting ¥50 billion annual profit enhancement over 10 years through structural reforms, FX gains, and investment incentives.

• Business portfolio focus on Oceania and Asia limits exposure to geopolitical risks in the US and Middle East.

• Comprehensive income turned negative at ¥(180.6) billion, impacted by significant foreign exchange translation losses.

Financial highlights

• Revenue for the first half declined 11.9% year-over-year to ¥1,048.8 billion, mainly due to lower oil and gas prices and yen appreciation.

• Operating profit for the first half fell 11.9% to ¥616.8 billion, while adjusted net profit after oil price and FX normalization is at a record high.

• Basic EPS increased 10.3% to ¥186.65; BPS declined 4.9% to ¥3,830.23.

• Cost of sales decreased 8.8% to ¥431.5 billion; exploration expenses fell 87.7% to ¥6.1 billion.

• Cash and cash equivalents rose to ¥262.4 billion, with net cash from operating activities at ¥427.9 billion for the period.

Outlook and guidance

• Full-year 2025 profit forecast raised to ¥370 billion, with revenue forecast at ¥1,995.0 billion and operating profit at ¥1,085.0 billion, assuming Brent averages $69/bbl and FX at ¥147/$.

• ROE expected at 8.2%, ROIC at 7.1%, both exceeding cost of equity.

• Cash flow before allocation over the next three years projected at ¥2.9 trillion, with ¥1.9 trillion earmarked for growth investment.

• Shareholder returns increased to ¥562.5 billion or more, with a progressive dividend policy and ¥80 billion share buyback; dividend forecast for 2025 raised to ¥100 per share.

• Abadi LNG FEED phase started, targeting FID in two years and production ramp-up as a future growth driver.