Third Quarter (April~December 2009) Operating Results and Full Year (April 2009~March 2010) Earnings Forecasts for the Fiscal Year Ending March 2010
Kazuhisa Nakano,
President and Representative Director
I would like to begin by expressing my gratitude for the support we have received from our shareholders.
Idemitsu Kosan Co., Ltd. ("Idemitsu" or the "Company") takes pleasure in providing an overview of its business environment and operating performance for the third quarter of the fiscal year ending March 2010 as well as its performance outlook for the fiscal year, announced today (February 2).
【Operating Results】
Third Quarter
Consolidated net sales decreased by 29.3% year-on-year to ¥2,231.9 billion due to a decrease in crude oil prices.
While operating profit in the petrochemical business increased due to strong demand from China, the petroleum products business reported a significant decrease in operating profit due to a continued decrease in domestic demand for fuel oil and deterioration in petroleum product markets across the globe. The oil exploration and development business also reported a decrease in operating profit due to lower crude oil prices.
As a result, consolidated operating and recurring profit decreased by 66.1% and 75.2% year-on-year, respectively, to ¥35.1 billion and ¥24.5 billion, respectively.
Outlook for the Full Fiscal Year
Assuming a crude oil price of $80 per barrel, naphtha (petrochemical raw material) price of $740 per ton, and an exchange rate of 90 JPY/USD in February－March 2010, we are forecasting consolidated net sales of ¥3,180.0 billion, operating profit of ¥42.0 billion, recurring profit of ¥28.0 billion, and net income of ¥6.0 billion for the fiscal year ending March 2010.
While we forecasted increased demand and improved margins in heater fuel oils during the winter months when announcing our interim performance on November 4, 2009, the warm weather in early winter put a damper on fuel oil demand and product margins.
While we will continue to dedicate its utmost efforts in improving the Company’s earnings, we have revised the previously announced forecasts for the fiscal year in light of the conditions described above.
Please refer to the financial results and the financial highlights for details.
【Dividends】
Despite the difficult operating environment, dividends for the fiscal year will remain unchanged at ¥150 per share. Thus, the fiscal year-end dividend is expected to be ¥75 per share, in line with the interim dividend.
【Medium-term Management Plan】
While we announced the general framework for our new medium-term management plan including basic policies and investments last April, we are currently formulating an implementation plan which reflects subsequent changes in the operating environment. Around April, we plan to announce our "Third Consolidated Medium-term Management Plan" which positions FY 2010 as its first year.
I would like to conclude by asking for your kind understanding and continued support as we engage in our best efforts to overcome the difficult operating environment, which is expected to persist for some time, as well as to strengthen our earning capacity going forward.
Kazuhisa Nakano
President and Representative Director
Idemitsu Kosan Co., Ltd.
