Consolidated Financial Results for the First Quarter of Fiscal Year 2017 (PDF:332 KB)

August 14, 2017

Consolidated Financial Results for the First Quarter of Fiscal Year 2017 (From April 1, 2017 to June 30, 2017) [Japan GAAP]

Company Name: Idemitsu Kosan Co.,Ltd. (URL http://www.idemitsu.com) Company Code: 5019, Shares listed on: Tokyo Stock Exchange

Name of Representative: Takashi Tsukioka, Representative Director & Chief Executive Officer Contact person: Koji Tokumitsu, General Manager, Investor Relations Office, Treasury Department Telephone: [phone]

Scheduled date of filing of quarterly securities report: August 14, 2017 Scheduled date of commencement of dividend payments: － Supplementary materials for the quarterly financial results: Yes

Quarterly financial results presentation: Yes (for institutional investors and analysts)

(Figures less than ¥1 million are rounded off)

1. Consolidated Financial Results for the First Quarter of FY2017 (From April 1, 2017 to June 30, 2017)

2. Consolidated operating results

   (Percentage figures represent changes from the corresponding previous period)

   Net sales		Operating income		Ordinary income		Net income attributable to owners of the parent
   1Q FY2017	¥million	%	¥million	%	¥million	%	¥million	%
   	831,713	22.5	34,583	40.7	39,051	61.4	25,367	37.8
   1Q FY2016	678,761	(26.4)	24,573	36.3	24,189	51.0	18,411	61.6

   Notes: Comprehensive income 1Q FY2017 ¥19,571million 196.0 % 1Q FY2016 ¥ 6,612 million － %

   Net income per share	Diluted net income per share
   1Q FY2017	¥	¥
   	158.59	－
   1Q FY2016	115.10	－

3. Consolidated financial position

Total assets	Net assets	Equity ratio
1Q FY2017	¥million	¥million	%
	2,628,690	634,758	22.9
FY2016	2,641,633	619,932	22.1

Reference: Total equity 1Q FY 2017 ¥601,370 million FY 2016 ¥583,800 million

4. Dividends

   Cash dividends per share
   As of Jun.30	As of Sep.30	As of Dec.31	As of Mar.31	Total
   FY2016	¥	¥	¥	¥	¥
   	－	25.00	－	25.00	50.00
   FY2017	－
   FY2017 (Forecasts)	25.00	－	25.00	50.00

   Notes: Revisions of the forecasts of cash dividends since the latest announcement: None

5. Forecasts of Consolidated Financial Results for FY2017 (From April 1, 2017 to March 31, 2018)

(Percentage figures represent changes from the prior year)

Net sales		Operating income		Ordinary income		Net income attributable to owners of the parent		Net income per share
FY2017	¥million	%	¥million	%	¥million	%	¥million	%	¥
	3,500,000	9.7	124,000	(8.3)	140,000	0.0	89,000	0.9	463.44

Notes: Revisions of the forecasts of consolidated financial results since the latest announcement: None

Setting July 20, 2017 as the due date of payment, the Company issued 48,000,000 common shares through a public offering. The fiscal 2017 forecast for consolidated net income per share is calculated based on the estimated average number of shares outstanding during the fiscal year, including the publicly offered common shares.

* Notes

1. Changes of number of material consolidated subsidiaries during the three months ended June 30, 2017: None

2. Application of the accounting method peculiar to the preparation of the quarterly financial statements: Yes

3. Changes in accounting policies, accounting estimates and restatement

4. Changes in accounting policies arising from revision of accounting standards: None

5. Changes arising from other factors: None

6. Changes in accounting estimates: None

7. Restatement: None

8. Number of shares issued (common stock)

9. Number of shares issued (including treasury stock)

   As of June 30, 2017: 160,000,000 As of March 31, 2017: 160,000,000

10. Number of shares of treasury stock

    As of June 30, 2017: 47,276 As of March 31, 2017: 47,236

11. Weighted average number of shares outstanding during the period Three months ended June 30, 2017: 159,952,737

Three months ended June 30, 2016: 159,953,044

*1 This document is out of the scope of the quarterly review procedures under the Financial Instruments and Exchange Act.

*2 The financial forecasts above are based on information available and assumptions as of the date of publication of this document. Actual operating results may differ from the forecasts due to various factors. Additionally, for the assumptions used for the forecasts of the above, please refer to page 4 "Explanation of Forecasts of Consolidated Financial Results for FY 2017" of the Appendix.

Contents of the Appendix

1. Qualitative Information on the Consolidated Operating Results for the First Quarter of FY2017……….		2
(1) Explanation of Operating Results.………………………………………………………………………………...		2
(2) Explanation of Financial Position..………………………………………………………………………………..		4
(3) Explanation of Forecasts of Consolidated Financial Results for FY 2017 …………………………………...		4
2. Consolidated Financial Statements for the First Quarter of FY2017 and Major Notes …………. …. …. . .		5
(1) Consolidated Quarterly Balance Sheets …………………………………………………………………………..		5
(2) Consolidated Quarterly Statements of Income and Comprehensive Income …………………………………..		7
1) Consolidated Quarterly Statements of Income ………………………………………………………………		7
2) Consolidated Quarterly Statements of Comprehensive Income ……………………………………………		8
(3) Notes to the Consolidated Financial Statements……………………………………………………………….…		9
1) Notes on the Assumption of a Going Concern……………………………………………………………		9
2) Notes on Significant Changes in Shareholders' Equity…………………………………………………...		9
3) Application of the Accounting Method Peculiar to the Preparation of the Quarterly Financial Statements.	…………………………………	9
4) Consolidated Segment Information ……………………………………………………………………..……		9
5) Significant Subsequent Events ………………………………………………………………………….		10

1. Qualitative Information on the Consolidated Operating Results for the First Quarter of FY 2017

(1) Explanation of Operating Results

The overall domestic demand for petroleum products during the first quarter of fiscal 2017 remained roughly flat from the same period of the previous year.

While Dubai crude oil prices hovered around the $50/bbl level in April and May on the back of increasing geopolitical risks mainly in Syria and expectations of extended coordinated production cut by OPEC, they temporarily fell below $44/bbl in June due to higher supply from two OPEC states exempt from a production-cutting deal, Libya and Nigeria, as well as rising shale-oil production. Consequently, the average crude oil price for the first quarter of fiscal 2017 was $49.8/bbl, an increase of $6.6/bbl against the same period of the previous year.

Demand for petrochemical products during the first quarter of fiscal 2017 was almost consistent with the same period of fiscal 2016. The price for naphtha, a petrochemical raw material, grew by $86/ton against the same period of last year to $482/ton.

(Crude oil price, naphtha price and exchange rate)

Three months ended June 30, 2016	Three months ended June 30, 2017	Change
Dubai Crude Oil ($/bbl)	43.2	49.8	+6.6	+15.2 %
Naphtha ($/ton)	395	482	+86	+21.9 %
Exchange Rate (¥/$)	109.1	112.1	+3.0	+2.7 %

The Idemitsu Group's net sales for the first quarter of fiscal 2017 were ¥831.7 billion, an increase of 22.5% compared with the same period of the preceding year, due mainly to increased import prices for crude oil.

Operating income increased by 40.7% against the same period of the preceding year to

¥34.6 billion, due mainly to the negative effect of inventory valuation, which was partially offset by the effects of higher margins on petroleum products and increased resource prices. Net non-operating income during the quarter totaled ¥4.5 billion, an increase of

¥4.9 billion from the same period of last year, owing primarily to increased share of profit of entities accounted for using the equity method. As a result, ordinary income was ¥39.1 billion, an increase of 61.4% compared with the same period of last year.

Net income attributable to owners of the parent increased by 37.8% compared with the same period of fiscal 2016 to ¥25.4 billion.

The performance of each business segment for the three months ended June 30, 2017 is as follows:

As to quarterly reporting periods, domestic subsidiaries use June 30 as their balance sheet date whereas overseas subsidiaries use March 31 as their balance sheet date, except for certain subsidiaries. As such, the following performance of the business segments includes the operating results of overseas subsidiaries for the three months ended March 31, 2017, and those of domestic subsidiaries for the three months ended June 30, 2017.