Japan Petroleum Exploration (1662) Q2 2023 earnings summary

Executive summary

• H1 FY3/23 net sales rose 2% YoY to ¥120.7bn; operating profit doubled to ¥19.3bn and net income swung to ¥31.4bn from a ¥119.7bn loss.

• FY3/23 guidance was raised, with forecast net income up 32% versus August to ¥53.0bn; the annual dividend forecast was revised to ¥300 per share.

Financial highlights

• H1 gross profit increased 32% YoY to ¥34.0bn; ordinary profit rose 123% to ¥43.1bn.

• Net income improved by ¥151.1bn YoY, reflecting higher operating profit and non-operating gains, plus the absence of prior-year extraordinary losses tied to Canadian project exits.

• H1 operating cash flow was ¥42.8bn versus an outflow of ¥7.6bn in the prior-year period.

Outlook and guidance

• FY3/23 forecast net sales rose 10% versus August to ¥304.6bn; gross profit increased 11% to ¥77.2bn, operating profit 14% to ¥45.2bn, and ordinary profit 31% to ¥67.0bn.

• Forecast profit attributable to owners of parent increased 32% versus August to ¥53.0bn; operating profit growth reflects improved domestic natural gas and power sales.

• FY3/23 forecast assumptions include CIF crude at $93.04/bbl and ¥128.59/$; forecast WTI is $94.33/bbl.

• Forecasts include ¥5bn of additional cost provision for possible LNG spot procurement.