Fuji Oil : Nov. 30，2022 Consolidated Financial Results for the Six Months Ended September 30, 2022 (Under Japanese GAAP) （124KB）

Note: This document has been translated from the Japanese original for reference purposes only. In the event of any discrepancy between this translated document and the Japanese original, the original shall prevail.

Consolidated Financial Results for the Six Months Ended September 30, 2022

(Under Japanese GAAP)

	November 10, 2022
Company name:	Fuji Oil Company, Ltd.
Listing:	Tokyo Stock Exchange
Securities code:	5017
URL:	http://www.foc.co.jp/
Representative:	Shigeto Yamamoto, Representing Director, President
Inquiries:	Ryuji Suzuki, General Manager, General Administration Department
Telephone:	[phone]

Scheduled date to file quarterly securities report:	November 14, 2022
Scheduled date to commence dividend payments:	-
Preparation of supplementary materials on quarterly financial results:	Yes (Japanese only)
Holding of quarterly financial results briefing:	Yes (for institutional investors and analysts)

(Yen amounts are rounded down to millions, unless otherwise noted.)

1. Consolidated financial results for the six months ended September 30, 2022 (from April 1, 2022 to September 30, 2022)

(1) Consolidated operating results (cumulative)						(Percentages indicate year-on-year changes.)
		Net sales		Operating profit		Ordinary profit	Profit attributable to
				owners of parent
For the six months ended	Millions of yen		%	Millions of yen		%	Millions of yen		%	Millions of yen		%
										-			-				-
September 30, 2022	444,773		199.1	16,474		17,276		14,482
For the six months ended											-			-				-
September 30, 2021	148,681		(8.6)	(1,083)		(1,359)		(302)
(Note)	Total comprehensive income:
	For the six months ended September 30, 2022: 19,807 million yen (- %)
	For the six months ended September 30, 2021: 1,118 million yen ([72.3]%)
		Basic earnings per share	Diluted earnings per
										share
For the six months ended					Yen -				Yen	-
			187.84					-
September 30, 2022
For the six months ended				(3.93)					-
September 30, 2021
(2) Consolidated financial position
		Total assets		Net assets		Equity-to-asset ratio
		Millions of yen			Millions of yen			%
As of September 30, 2022				425,856			83,607			19.6
As of March 31, 2022				352,842			64,539			18.2
(Reference) Equity:
	As of September 30, 2022:		83,429 million yen
	As of March 31, 2022:		64,369 million yen
2. Cash dividends
								Annual dividends per share
		First quarter-		Second quarter-	Third quarter-	Fiscal year-end	Total
		end			end		end
Fiscal year ended March	Yen	-			Yen -		Yen	-	Yen -		Yen -
			-			0.00			-	10.00		10.00
31, 2022
Fiscal year ending March				-			0.00
31, 2023
Fiscal year ending March											-	10.00		10.00
31, 2023 (forecast)
(Note)	Revisions to the forecast of cash	dividends most recently announced: None

3. Consolidated financial results forecast for the fiscal year ending March 31, 2023 (from April 1, 2022 to March 31, 2023)

							(Percentages indicate year-on-year changes.)
	Net sales		Operating profit	Ordinary profit	Profit attributable to	Basic earnings
		owners of parent	per share
	Millions of yen		%	Millions of yen	%	Millions of yen	%	Millions of yen	%	Yen	-
Full year	921,400		89.9	22,500	44.8	21,900	36.2	18,100	19.0	234.57

(Note) Revisions to the forecast of the financial results most recently announced: Yes

*Notes

(1) Changes in significant subsidiaries during the six months ended September 30, 2022		:	None
(2) Adoption of accounting treatment specific to the preparation of quarterly consolidated financial	:	None
statements
(3) Changes in accounting policies and accounting estimates, and restatement
(i)	Changes in accounting policies due to revisions to accounting standards and other		:	None
	regulations
(ii)	Changes in accounting policies due to reasons other than (i)				:	None
(iii)	Changes in accounting estimates					:	None
(iv)	Restatement					:	None
(4) Number of issued shares (common shares)
(i)	Total number of issued shares at the end of	As of September 30,	78,183,677 shares		As of March 31,	78,183,677 shares
	the period (including treasury shares)	2022			2022
(ii)	Number of treasury shares at the end of the	As of September 30,	1,020,909 shares		As of March 31,	1,121,198 shares
	period	2022		2022
(iii) Average number of shares outstanding	For the six months	77,098,645 shares		For the six months	77,062,479 shares
	during the period	ended September 30,		ended September
	2022			30, 2021

• Quarterly financial results reports are exempt from quarterly review conducted by certified public accountants or an audit corporation.
• Proper use of earnings forecasts, and other special matters
  The forward-looking statements such as financial results forecasts contained in this document are based on information currently available to the Company and certain assumptions deemed to be reasonable. Actual financial results may differ significantly from the forecasts due to various factors. For the assumptions underlying the financial results forecasts and cautions concerning the use thereof, please refer to "Explanation of Consolidated Financial Results Forecasts and Other Forward-Looking Statements" on page 3 of the attachment.
  The Company will hold a financial results briefing for institutional investors and analysts. Financial results materials used in this briefing will be disclosed on TDnet on the same day and posted on our company website. In addition, a transcript of the financial results briefing and a summary of questions and answers will be disclosed on our company website within a few days after the financial results briefing.

○Table of Contents of Attachment
1. Qualitative Information on Financial Results for the First Six Months of the Current Fiscal Year .........................................	2
(1)	Explanation of Operating Results ...............................................................................................................................	2
(2)	Explanation of Financial Position...............................................................................................................................	2
(3)	Explanation of Consolidated Financial Results Forecasts and Other Forward-Looking Statements ...............................	3
2. Quarterly Consolidated Financial Statements and Significant Notes Thereto .......................................................................	4
(1)	Quarterly Consolidated Balance Sheet........................................................................................................................	4
(2)	Quarterly Consolidated Statement of Income and Quarterly Consolidated Statement of Comprehensive Income ...........	6
(3)	Consolidated Statement of Cash Flows.......................................................................................................................	8
(4)	Notes to Quarterly Consolidated Financial Statements ................................................................................................	9
	(Notes on Going Concern Assumptions) ....................................................................................................................	9
	(Notes on Substantial Changes in the Amount of Shareholders' Equity) ......................................................................	9
	(Additional Information) ...........................................................................................................................................	9
	(Segment Information, etc.).......................................................................................................................................	9

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1. Qualitative Information on Financial Results for the First Six Months of the Current Fiscal Year

1. Explanation of Operating Results

In the first six months ended September 30, 2022, the Dubai crude oil price, at the level of US$101/bbl in the beginning of the fiscal year, rose to the US$118/bbl level in mid-June. This was because of the perception that supply and demand would tighten as the European Union announced its policy of gradually banning imports of Russian crude oil and petroleum products. After that, as China went into a lockdown again, and countries continued to raise interest rates, the perception that demand for crude oil would decline prevailed. In late June, the crude oil price entered a downward trend. In late September, when the FRB decided to raise interest rates by 0.75 percentage points for the third consecutive meeting, concerns about a global economic downturn led to a further decline in price, ending the quarter at the US$89/bbl level. As a result, the average Dubai crude oil price during the first six months ended September 30, 2022 was approximately US$102/bbl.

On the other hand, the exchange rate, which started at the lower ¥122/US$ range, saw a growing trend for a weaker yen and stronger dollar due to the interest-rate hikes accelerated by the U.S. that rushed to contain inflation. The rate maintained a range above ¥140/US$ from September onward. In late September, the Japanese government and the Bank of Japan intervened in the foreign exchange market for the first time in about 24 years. However, the yen continued to depreciate against the dollar, which made the dollar-yen rate at the end of the six-month period in the higher ¥144/US$ range. As a result, the average exchange rate during the first six months of the current fiscal year was at the lower ¥134/US$ range.

Under such business environment, the recovery from the impact of the major periodic shut-down maintenance, conducted once in four years including the most recent operation done from May to July in the previous year, increased crude oil processing at the Sodegaura Refinery plant by 1.727 million kiloliters year on year to 3.930 million kiloliters. And the Company's sales volume of petroleum products and petrochemical products increased by 1.878 million kiloliters to 4.017 million kiloliters.

Given such circumstances, the consolidated financial results for the first six months ended September 30, 2022 were as follows. Net sales grew 296.0 billion yen year on year to 444.7 billion yen, mainly due to an increase in sales volume recovering from the impact of the major periodic shut-down maintenance. As for profit, operating profit was 16.4 billion yen, up 17.5 billion yen year on year, due to the effect of inventory valuation calculated by the average method and inventory write-downs based on a decrease in profitability, which drove down the cost of sales by 12.6 billion yen (compared with 7.1 billion yen in the same period of the previous fiscal year). Ordinary profit was 17.2 billion yen, up 18.6 billion yen year on year, due to recognizing foreign exchange gains of 1.5 billion yen and posting equity in earnings of affiliates of 1.6 billion yen, despite recording interest expenses of 2.2 billion yen. Profit attributable to owners of parent was 14.4 billion yen, up 14.7 billion yen year on year.

As for profit in real terms, excluding the effect of the inventory valuation, operating profit amounted to 3.8 billion yen, up 12.0 billion yen year on year, and ordinary profit was 4.6 billion yen, up 13.0 billion yen year on year, due to the recovery from the impact of the major periodic shut-down maintenance and other factors.

1. Explanation of Financial Position

1. Status of assets, liabilities and net assets (Current assets)
   At the end of the second quarter of the fiscal year under review, current assets totaled 296.7 billion yen, an increase of 71.7 billion yen compared with the end of the previous fiscal year. This was mainly due to a 62.7 billion yen increase in inventories, a 15.6 billion yen increase in notes and accounts receivable - trade, and contract assets, and a 7.2 billion yen decrease in accounts receivable - other.

(Non-current assets)

At the end of the second quarter of the fiscal year under review, non-current assets increased 1.2 billion yen compared with the end of the previous fiscal year to 129.1 billion yen. This was mainly due to a 4.8 billion yen increase in investment securities, a 2.1 billion yen decrease in machinery, equipment and vehicles, and a 0.5 billion yen decrease in construction in progress.

(Current liabilities)

At the end of the second quarter of the fiscal year under review, current liabilities totaled 302.7 billion yen, an increase of

55.5 billion yen compared with the end of the previous fiscal year. This was mainly due to a 38.5 billion yen increase in short-term loans payable, a 13.2 billion yen increase in excise taxes payable on gasoline and other fuels, a 6.9 billion yen increase in accounts payable - trade, and a 7.5 billion yen decrease in accounts payable - other.

(Non-current liabilities)

At the end of the second quarter of the fiscal year under review, non-current liabilities totaled 39.5 billion yen, a decrease of

1.5 billion yen compared with the end of the previous fiscal year. This was mainly due to a 3.8 billion yen decrease in long- term loans payable and a 1.5 billion yen increase in provision for repairs.

(Net assets)

At the end of the second quarter of the fiscal year under review, net assets increased 19.0 billion yen compared with the end of the previous fiscal year to 83.6 billion yen. This was mainly due to a 13.7 billion yen increase in retained earnings and a 4.4 billion yen increase in foreign currency translation adjustments.

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(ii) Status of cash flows

Cash and cash equivalents at the end of the first six months ended September 30, 2022 totaled 9.0 billion yen, an increase of 1.1 billion yen compared with the end of the previous fiscal year.

(Cash flows from operating activities)

In the first six months ended September 30, 2021, net cash used in operating activities was 33.4 billion yen, mainly due to an increase in inventories of 17.0 billion yen and an increase in notes and accounts receivable-trade of 21.5 billion yen. Meanwhile, in the first six months ended September 30, 2022, net cash used in operating activities was 32.7 billion yen, mainly as cash used, such as an increase in inventories of 62.7 billion yen and an increase in notes and accounts receivable- trade of 15.6 billion yen, exceeded profit before income taxes of 17.2 billion yen among others.

(Cash flows from investing activities)

In the first six months ended September 30, 2021, net cash used in investing activities was 1.5 billion yen, mainly due to the purchase of property, plant and equipment of 1.3 billion yen.

Meanwhile, in the first six months ended September 30, 2022, net cash used in investing activities was 0.4 billion yen, mainly due to the purchase of property, plant and equipment of 1.1 billion yen.

(Cash flows from financing activities)

In the first six months ended September 30, 2021, net cash provided by financing activities was 31.5 billion yen, mainly due to a net increase of 30.6 billion yen in short-term loans payable.

Meanwhile, in the first six months ended September 30, 2022, net cash provided by financing activities was 34.5 billion yen, mainly due to a net increase of 39.2 billion yen in short-term loans payable.

(3) Explanation of Consolidated Financial Results Forecasts and Other Forward-Looking Statements

The financial results forecasts for the full year are revised to reflect the trend of financial results and other factors after the previous forecasts (announced on August 10, 2022).

The assumptions for the revised forecast are an average Dubai crude oil price of US$90/bbl in the third quarter and later (previous forecast: US$90/bbl) and an exchange rate of ¥145/US$ (previous forecast: ¥130/US$).

Net sales for the full year are expected to increase by 49.7 billion yen from the previous forecast to 921.4 billion yen.

As for profit, the Company expects that despite a more substantive effect of inventory valuation on lowering the cost of sales due to the revision of the assumed exchange rate, profit decreasing factors such as falling product margins and rising home fuel costs associated with the weak yen will exceed the said effect. As a result, operating profit is expected to decrease by 3.4 billion yen from the previous forecast to 22.5 billion yen, ordinary profit by 2.2 billion yen to 21.9 billion yen, and profit attributable to owners of parent by 1.9 billion yen to 18.1 billion yen.

As for profit in real terms, excluding the effect of the inventory valuation, for the full year, operating profit is expected to fall 12.5 billion yen from the previous forecast to 5.8 billion yen, and ordinary profit by 11.3 billion yen to 5.2 billion yen.

The above forecasts are based on information available as of the date of publication of this document. Actual results may differ from the forecasts due to various factors.

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