Japan Petroleum Exploration (1662) Q4 2026 earnings summary

Executive summary

• Net sales for FY3/26 declined 13% year-over-year to ¥340.3 billion, with operating profit down 37% to ¥38.9 billion and net income attributable to owners of parent down 34% to ¥53.4 billion, mainly due to lower crude oil and natural gas prices and reduced LNG sales volume.

• Extraordinary gain from the sale of the Hokkaido gas business contributed ¥31.0 billion, with a net income impact of ¥22.0 billion.

• Comprehensive income more than doubled to ¥114,794 million, driven by valuation gains on securities.

• U.S. business drove profit growth, while overseas E&P investments and divestments reshaped the portfolio.

• Key management targets for FY2026 were achieved ahead of schedule, but asset-building for sustainable growth remains incomplete.

Financial highlights

• Operating profit fell by ¥23.1 billion year-over-year, primarily due to lower crude oil and natural gas prices and decreased LNG sales volume.

• Ordinary profit decreased by ¥2.7 billion, and net income attributable to owners of parent dropped by ¥27.7 billion.

• Gross profit declined 22.6% year-over-year to ¥76,741 million.

• Profit before income taxes dropped 41.5% year-over-year to ¥63,557 million, mainly due to the absence of prior-year gains on investment securities.

• FY3/26 dividend per share was ¥65 (interim ¥20, year-end ¥45), with a payout ratio of 31.1%.

Outlook and guidance

• FY3/27 forecasts: net sales ¥303.0 billion (down 11%), operating profit ¥41.0 billion (up 5%), ordinary profit ¥45.0 billion (down 27%), and net income attributable to owners of parent ¥60.0 billion (up 12%).

• Dividend forecast for FY3/27: interim ¥22.5, year-end ¥22.5 per share.

• Assumes WTI at $73/bbl, crude oil CIF at $74.91/bbl, and exchange rate at ¥152.90/USD.

• FY3/27 sales expected to decrease mainly due to suspended operations in Iraq, but profit growth is driven by North American expansion and a business transfer.

• Annual dividend for FY3/27 is planned at ¥45 per share.