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MarketScreener Homepage  >  Equities  >  Tokyo Stock Exchange  >  Idemitsu Kosan Co.,Ltd.    5019   JP3142500002

IDEMITSU KOSAN CO.,LTD.

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Idemitsu Kosan : Consolidated Financial Results for the Third Quarter of FY2019(415KB)

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02/14/2020 | 03:49am EDT

February 14, 2020

Consolidated Financial Results for the Third Quarter of

Fiscal Year 2019 (From April 1, 2019 to December 31, 2019) [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: Shunichi Kito, Representative Director & Chief Executive Officer

Contact Person: Koji Tokumitsu, General Manager, Investor Relations Office, Finance Department

Telephone: +81-3-3213-9307

Scheduled date of filing of quarterly securities report: February 14, 2020

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 Third Quarter of FY2019 (From April 1, 2019 to December 31, 2019)

(1) Consolidated operating results

(Percentage figures represent changes from the corresponding previous period)

Net income

Net sales

Operating income

Ordinary income

attributable to owners

of the parent

¥million

%

¥million

%

¥million

%

¥million

%

3Q FY2019

4,560,673

36.5

108,190

(24.5)

91,399

(42.6)

64,927

(36.2)

3Q FY2018

3,340,100

25.4

143,244

(8.4)

159,281

(6.2)

101,777

(29.8)

Note: Comprehensive income

3Q FY2019

¥48,219 million (49.1) %

3Q FY2018 ¥94,753 million (39.4)%

Net income per share

Diluted net income

per share

¥

¥

3Q FY2019

215.41

3Q FY2018

497.49

(2) Consolidated financial position

Total assets

Net assets

Equity ratio

¥million

¥million

%

3Q FY2019

4,126,077

1,296,091

30.2

FY2018

2,890,307

878,931

29.1

Reference: Total equity

3Q FY2019

¥1,245,536 million

FY2018 ¥842,099 million

2. Dividends

Cash dividends per share

As of Jun.30

As of Sep.30

As of Dec.31

As of Mar.31

Total

¥

¥

¥

¥

¥

FY2018

50.00

50.00

100.00

FY2019

80.00

FY2019

80.00

160.00

(Forecasts)

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

3. Forecasts of Consolidated Financial Results for FY2019 (From April 1, 2019 to March 31, 2020)

(Percentage

figures represent changes from the

previous

fiscal year)

Net income

Net income

Net sales

Operating income

Ordinary income

attributable to

per share

owners of the parent

¥million

%

¥million

%

¥million

%

¥million

%

¥

FY2019

6,100,000

37.8

165,000

(8.0)

150,000

(11.3)

100,000

22.8

332.71

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

Setting March 24, 2020 as the due date of acquisition, the Company planned to acquire treasury shares with an upper limit of 4,800,000 shares. Up to January 24, 2020, the Company had acquired 4,060,800 treasury shares and completed the acquisition on the day. The fiscal 2019 forecast for consolidated net income per share is calculated by reflecting the number of the acquired treasury shares in the average number of shares during the fiscal year.

* Notes

  1. Changes of number of material consolidated subsidiaries during the nine months ended December 31, 2019: Yes

  2. Newly consolidated companies: 1 (Showa Shell Sekiyu K.K.)
  3. Application of the accounting method peculiar to the preparation of the quarterly financial statements: Yes
  4. Changes in accounting policies, accounting estimates and restatement
    1. Changes in accounting policies arising from revision of accounting standards: Yes
    2. Changes arising from other factors: Yes
    3. Changes in accounting estimates: None
    4. Restatement: None
  5. Number of shares issued (common stock)
    1. Number of shares issued (including treasury stock)

As of December 31, 2019:

301,925,518

As of March 31, 2019:

208,000,000

b) Number of shares of treasury stock

As of December 31, 2019:

2,474,965

As of March 31, 2019:

10,657,857

  1. Weighted average number of shares outstanding during the period Nine months ended December 31, 2019: 301,410,566
    Nine months ended December 31, 2018: 204,582,936

*1 This document is out of the scope of quarterly review by certified public accountants or audit firms.

*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 5 "Explanation of Forecasts of Consolidated Financial Results for FY2019" of the Appendix.

………………………………… 10

Contents of the Appendix

1. Qualitative Information on the Consolidated Operating Results for the Third Quarter of FY2019….…. 2

  1. Explanation of Operating Results.………………………………………………………………………………... 2

(2) Explanation of Financial Position………………………………………………………………………………… 5

  1. Explanation of Forecasts of Consolidated Financial Results for FY2019 …………………………………... 5

2. Consolidated Financial Statements for the Third Quarter of FY2019 and Major Notes……..……………. 6

  1. Consolidated Quarterly Balance Sheets ………………………………………………………………………….. 6
  2. Consolidated Quarterly Statements of Income and Comprehensive Income ………………………………….. 8

1)

Consolidated Quarterly Statements of Income ……………………………………………………………… 8

2)

Consolidated Quarterly Statements of Comprehensive Income …………………………………………… 9

  1. Notes to the Consolidated Quarterly Financial Statements………………………………………………….…. 10
    1. Notes on the Assumption of a Going Concern…………………………………………………………… 10
    2. Notes on Significant Changes in Shareholders' Equity…………………………………………………... 10
    3. Change in Accounting Policies…………………………………………………………………………… 10

4) Application of the Accounting Method Peculiar to the Preparation of the Quarterly Financial Statements

  1. Consolidated Segment Information ……………………………………………………………………..…… 11
  2. Significant Subsequent Events........................…. 13

1

1. Qualitative Information on the Consolidated Operating Results for the Third Quarter of FY2019

  1. Explanation of Operating Results

The overall domestic demand for petroleum products during the nine months ended December 31, 2019 fell slightly below the previous year's level, owing to improved fuel efficiency of vehicles and other structural factors.

Dubai crude oil prices were hovering around $70/bbl until the middle of May 2019, but the declining trend continued from late May in the wake of growing uncertainty in the global economy mainly on the back of US-China trade tensions. Positive factors such as the larger production cut agreed by the so-calledOPEC-plus alliance in December then turned the trend upward. On balance, the average crude oil price from April to December 2019 was $63.5/bbl, a decrease of $7.7/bbl against the same period of the previous year.

The price for naphtha, a petrochemical raw material, dropped by $118/ton against the same period last year to $534/ton.

(Crude oil price, naphtha price and exchange rate)

Nine months ended

Nine months ended

Change

December 31, 2018

December 31, 2019

Dubai Crude Oil ($/bbl)

71.3

63.5

(7.7)

(10.8)%

Naphtha ($/ton)

652

534

(118)

(18.1)%

Exchange Rate (¥/$)

111.1

108.7

(2.5)

(2.2)%

The Idemitsu Group's net sales for the nine months ended December 31, 2019 were ¥4,560.7 billion, an increase of 36.5% compared with the same period of the preceding year, due mainly to the business integration through the share exchange that the Company and Showa Shell Sekiyu K.K. ("Showa Shell") conducted on April 1, 2019.

Operating income decreased by 24.5% against the same period of the previous year to

¥108.2 billion, owing mainly to the effect of inventory valuation in the petroleum products segment as well as the decreased production volume and lower prices for natural resources in the resources segment.

Net non-operating loss during the period totaled ¥16.8 billion, a decline of ¥32.8 billion from the same period of last year, owing primarily to recording equity in losses of nonconsolidated subsidiaries and affiliates. As a result, ordinary income was ¥91.4 billion, down 42.6% compared with the same period of last year.

Net extraordinary income was ¥11.4 billion, an increase of ¥9.4 billion from the same period of the previous year, owing primarily to gain from step acquisition of Showa Shell shares.

Income tax expenses, which consist of income taxes-current and income taxes-deferred, amounted to ¥36.1 billion, a decrease of ¥18.0 billion from the same period of the previous year, due mainly to a decrease of income before income taxes.

Net income attributable to owners of the parent decreased by 36.2% compared with the same period of fiscal 2018 to ¥64.9 billion.

2

[Reference]

Net sales and operating income decreased by 12.2% and 43.8%, respectively for the nine months ended December 31, 2019 compared with pro forma net sales and operating income for the same period of the previous fiscal year assuming that the Company consolidated 100% of Showa Shell's operating results.

The performance of each business segment for the nine months ended December 31, 2019 is as follows:

As described in "2. (3) 5) Consolidated Segment Information", as a result of the business integration with Showa Shell, effective from the first quarter of fiscal 2019, the Company's previous three reportable segments of "Petroleum products," "Petrochemical products" and "Resources" have been reclassified to the current five reportable segments of "Petroleum," "Basic chemicals," "Functional materials," "Power and renewable energy" and "Resources."

[Petroleum segment]

Net sales in the petroleum segment were ¥3,630.4 billion, up 47.4% compared to the same period of the previous fiscal year. Segment income (operating income + equity in earnings (losses) of nonconsolidated subsidiaries and affiliates) was ¥16.8 billion, down 61.2% year on year, primarily affected by the effect of inventory valuation and equity in losses recorded during the period.

[Reference]

Net sales and segment income (operating income + equity in earnings (losses) of nonconsolidated subsidiaries and affiliates) decreased by 10.7% and 80.8%, respectively compared with pro forma net sales and segment income for the same period of the previous fiscal year assuming that the Company consolidated 100% of Showa Shell's operating results.

[Basic chemicals segment]

Net sales in the basic chemicals segment decreased by 3.9% year compared with the same period of the previous fiscal year to ¥350.0 billion, due largely to decreases in naphtha prices on a customs clearance basis. Segment income (operating income + equity in earnings (losses) of nonconsolidated subsidiaries and affiliates) was ¥18.0 billion, down 27.3% year on year, mainly due to lower margins on styrene monomer and other products.

[Functional materials segment]

Net sales in the functional materials segment for the nine months ended December 31, 2019 were ¥294.0 billion, up 11.2% from the same period of fiscal 2018. Segment income

(operating income + equity in earnings (losses) of nonconsolidated subsidiaries and affiliates)

was ¥20.2 billion, down 11.5% from the same period of the prior year, due mainly to a decrease in equity in earnings of nonconsolidated subsidiaries and affiliates.

[Reference]

Net sales and segment income (operating income + equity in earnings (losses) of nonconsolidated subsidiaries and affiliates) decreased by 9.6% and 19.5%, respectively compared with pro forma net sales and segment income for the same period of the previous fiscal year assuming that the Company consolidated 100% of Showa Shell's operating results.

3

[Power and renewable energy segment]

Net sales in the power and renewable energy segment for the nine months ended December 31, 2019 were ¥94.6 billion, up 469.5% from the same period of fiscal 2018. Segment loss

(operating income + equity in earnings (losses) of nonconsolidated subsidiaries and affiliates) was ¥0.5 billion, a decline of ¥1.2 billion from the same period of the prior year.

[Reference]

Net sales decreased by 10.6% and segment income (operating income + equity in earnings (losses) of nonconsolidated subsidiaries and affiliates) increased by ¥8.0 billion compared with pro forma net sales and segment income for the same period of the previous fiscal year assuming that the Company consolidated 100% of Showa Shell's operating results.

[Resources segment]

(Oil exploration and production and geothermal energy business)

Net sales of the oil exploration and production business and the geothermal energy business for the nine months ended December 31, 2019 were ¥35.9 billion, down 38.8% from the corresponding period of the previous year, due mainly to a decrease of the production volume and a decline in crude oil price. Segment income (operating income + equity in earnings (losses) of nonconsolidated subsidiaries and affiliates) was ¥12.2 billion, down 59.2% from the same period of the preceding year.

(Coal business and others)

Net sales of the coal business and others for the nine months ended December 31, 2019 were ¥153.1 billion, down 10.3% compared with the same period of last year. Segment income (operating income + equity in earnings (losses) of nonconsolidated subsidiaries and affiliates) was ¥22.3 billion, down 39.7% compared with the same period of the preceding year, due mainly to a decline in coal price.

As a result, total net sales of the resources segment were ¥189.0 billion, down 17.6% and segment income (operating income + equity in earnings (losses) of nonconsolidated subsidiaries and affiliates) was ¥34.5 billion, down 48.4% from the same period of the preceding year.

[Other segments]

Net sales of the other segments for the nine months ended December 31, 2019 were ¥2.8 billion, down 13.3% and segment income (operating income + equity in earnings (losses) of nonconsolidated subsidiaries and affiliates) was ¥0.5 billion, down 89.6% compared with the same period of the preceding year since the Company's share of Showa Shell's earnings is not included as part of equity in earnings (losses) of nonconsolidated subsidiaries and affiliates under other segments.

4

  1. Explanation of Financial Position Summarized Consolidated Balance Sheets

(Unit: ¥Billion)

FY2018

3rd Quarter of

Change

FY2019

Current assets

1,225.4

1,840.6

+615.1

Fixed assets

1,664.9

2,285.5

+620.6

Total assets

2,890.3

4,126.1

+1,235.8

Current liabilities

1,195.8

1,841.5

+645.7

Non-current liabilities

815.6

988.5

+172.9

Total liabilities

2,011.4

2,830.0

+818.6

Total net assets

878.9

1,296.1

+417.2

Total liabilities and net assets

2,890.3

4,126.1

+1,235.8

  1. Total assets
    Total assets as of December 31, 2019 increased by ¥1,235.8 billion from the end of the previous fiscal year to ¥4,126.1 billion.
  2. Total liabilities
    Total liabilities as of December 31, 2019 increased by ¥818.6 billion from the end of the previous fiscal year to ¥2,830.0 billion.
  3. Total net assets
    Total net assets as of December 31, 2019 were ¥1,296.1 billion, an increase of ¥417.2 billion from the end of the preceding fiscal year, owing mainly to an increase in capital surplus of ¥341.1 billion associated with the share exchange on April 1, 2019, disposal of treasury stock, and the acquisition of treasury shares through market purchases.
  1. Explanation of Forecasts of Consolidated Financial Results for FY2019

There was no change in the forecasts of the consolidated financial results for the year ending March 31, 2020 released on November 14, 2019.

5

2. Consolidated Financial Statements for the Third Quarter of FY2019 and Major Notes

(1) Consolidated Quarterly Balance Sheets

(Unit: ¥Million)

FY2018

3rd Quarter of FY2019

(As of March 31, 2019)

(As of December 31, 2019)

Assets

Current assets:

Cash and deposits

91,850

125,225

Notes and accounts receivable, trade

453,316

708,216

Inventories

586,561

802,516

Other

94,801

206,406

Less: Allowance for doubtful accounts

(1,101)

(1,810)

Total current assets

1,225,427

1,840,554

Fixed assets:

Property, plant and equipment:

Machinery and equipment, net

182,800

259,442

Land

576,288

812,583

Other, net

232,939

367,738

Total property, plant and equipment

992,028

1,439,764

Intangible fixed assets:

Goodwill

7,214

171,148

Other

17,536

161,560

Total intangible fixed assets

24,750

332,709

Investments and other assets:

Investment securities

400,847

267,819

Other

247,948

245,990

Less: Allowance for doubtful

(696)

(761)

accounts

Total investments and other assets

648,100

513,048

Total fixed assets

1,664,879

2,285,522

Total assets

2,890,307

4,126,077

Liabilities

Current liabilities:

Notes and accounts payable, trade

399,176

627,900

Short-term loans payable

154,715

334,521

Commercial paper

204,000

288,999

Current portion of bonds payable

10,000

Accounts payable, other

305,563

415,237

Income taxes payable

30,634

24,276

Provision for bonuses

8,169

4,356

Other

83,541

146,222

Total current liabilities

1,195,800

1,841,513

Non-current liabilities:

Bonds payable

50,000

80,000

Long-term loans payable

531,168

508,780

Liability for employees' retirement

11,996

75,779

benefits

Reserve for repair work

38,267

70,221

Asset retirement obligations

51,620

56,427

Other

132,522

197,264

Total non-current liabilities

815,575

988,472

Total liabilities

2,011,376

2,829,985

6

(Unit: ¥Million)

FY2018

3rd Quarter of FY2019

(As of March 31, 2019)

(As of December 31, 2019)

Net assets

Shareholders' equity:

Common stock

168,351

168,351

Capital surplus

130,876

471,989

Retained earnings

466,750

497,500

Treasury stock

(56,022)

(7,603)

Total shareholders' equity

709,955

1,130,237

Accumulated other comprehensive

income:

Unrealized gains (losses) on available-

5,734

6,180

for-sale securities

Deferred gains (losses) on hedging

(6,730)

(8,457)

activities, net

Surplus from land revaluation

155,535

155,382

Foreign currency translation

(21,330)

(37,334)

adjustments

Defined retirement benefit plans

(1,064)

(472)

Total accumulated other

132,144

115,299

comprehensive income

Noncontrolling interests

36,831

50,555

Total net assets

878,931

1,296,091

Total liabilities and net assets

2,890,307

4,126,077

7

  1. Consolidated Quarterly Statements of Income and Comprehensive Income
  1. Consolidated Quarterly Statements of Income

(Unit: ¥Million)

3rd Quarter of FY2018 (From April 1, 2018 to December 31, 2018)

3rd Quarter of FY2019 (From April 1, 2019 to December 31, 2019)

Net sales Cost of sales Gross profit

Selling, general and administrative expenses Operating income

Non-operating income: Interest income Dividend income

Gain on foreign exchange, net

Equity in earnings of nonconsolidated subsidiaries and affiliates, net

Other

Total non-operating income Non-operating expenses:

Interest expense

Loss on foreign exchange, net Equity in losses of nonconsolidated

subsidiaries and affiliates, net Other

Total non-operating expenses Ordinary income Extraordinary income:

Gain on sales of fixed assets

Gain on sale of affiliate stock

Gain on dissolution of oil field premium contract

Gain from step acquisition Other

Total extraordinary income Extraordinary losses:

Impairment loss on fixed assets Loss on sales of fixed assets Loss on disposals of fixed assets Other

Total extraordinary losses Income before income taxes Income taxes

Net income

Net income attributable to noncontrolling interests

Net income attributable to owners of the parent

3,340,100

4,560,673

2,975,282

4,145,683

364,817

414,990

221,573

306,800

143,244

108,190

4,670

7,797

3,158

3,141

520

15,091

1,674

4,450

24,594

15,910

6,535

9,729

275

20,737

1,746

2,234

8,557

32,701

159,281

91,399

1,519

2,293

187

6,175

17,215

629

3,129

8,511

22,638

3,271

99

142

139

1,286

5,458

1,849

5,566

6,550

11,263

161,242

102,773

54,062

36,081

107,180

66,692

5,402

1,765

101,777

64,927

8

2) Consolidated Quarterly Statements of Comprehensive Income

(Unit: ¥Million)

3rd Quarter of FY2018

3rd Quarter of FY2019

(From April 1, 2018

(From April 1, 2019

to December 31, 2018)

to December 31, 2019)

Net income

107,180

66,692

Other comprehensive income:

Unrealized gains (losses) on available-for-

(2,890)

180

sale securities

Deferred gains on hedging activities, net

(1,636)

(60)

Foreign currency translation adjustments

(8,570)

(16,264)

Defined retirement benefit plans

414

(203)

Share of other comprehensive income in

256

(2,124)

equity method affiliates

Total other comprehensive income

(12,426)

(18,473)

Comprehensive income

94,753

48,219

Comprehensive income attributable to:

Owners of the parent

89,893

48,234

Noncontrolling interests

4,860

(15)

9

  1. Notes to the Consolidated Quarterly Financial Statements
  1. Notes on the Assumption of a Going Concern None
  2. Notes on Significant Changes in Shareholders' Equity
    On April 1, 2019, the Company and Showa Shell conducted the share exchange in which the Company became a wholly owning parent company and Showa Shell became a wholly owned subsidiary. As a result, capital surplus increased by ¥341,115 million and treasury stock decreased by ¥55,127 million.
    The Company also resolved on its board of directors' meeting on November 14, 2019, to acquire its treasury shares with an upper limit of 4,800,000 shares and ¥12.0 billion in aggregate. In accordance with this resolution, the Company had acquired 1,874,300 treasury shares amounting to the acquisition cost of ¥5,561 million up to December 31, 2019.
    Primarily due to these acquisitions, the Company's treasury stock increased by ¥6,708 million during the nine months ended December 31, 2019 to ¥7,603 million at December 31, 2019.
  3. Change in Accounting Policies
    1. Change in valuation method of available-for-sale securities with fair value

The Company previously used the average market price for the month that includes the reporting date when applying the fair value method to measure its equity instruments classified as available-for-sale securities. Effective April 1, 2019, the Company made change to the fair value method and implemented the use of the market price at each reporting date, which is the required method in principle when applying the fair value method.

This change was made to provide more relevant information regarding the Company's financial position upon the business integration with Showa Shell. Since the effect from this accounting policy change was not material, the new accounting policy was not applied retrospectively.

(b) Application of IFRS 16 "Leases"

Effective April 1, 2019, most non-US overseas subsidiaries of the Idemitsu Group adopted IFRS 16 "Leases." As a result, lessees under lease agreements recognize the assets and liabilities arising from all leases on the balance sheet in principle. The application of this accounting standard did not have material effect on the financial statements.

  1. Application of the Accounting Method Peculiar to the Preparation of the Quarterly Financial Statements

Income taxes are calculated by multiplying the income before income taxes for the nine months ended December 31, 2019 by the estimated effective tax rate that is reasonably estimated for income before income taxes for the fiscal year that includes the current quarter.

However, if the calculation using the relevant estimated effective tax rate leads to significantly irrational results, income taxes are calculated by multiplying the quarterly income before income taxes by the effective statutory tax rate, after adjusting important differences that do not constitute temporary differences.

10

  1. Consolidated Segment Information
    Third Quarter of FY2018 (From April 1, 2018 to December 31, 2018)
    1. Net sales and income or loss by reportable segment

(Unit: ¥Million)

Reportable segment

Others

Total

Reconciliation

Consolidated

Basic

Functional

Power and

Petroleum

chemicals

materials

renewable

Resources

Total

energy

Net sales:

Net sales to outside

2,462,441

364,360

264,283

16,612

229,223

3,336,922

3,178

3,340,100

3,340,100

customers

Inter-segment

14,039

17,600

14,342

514

690

47,187

1,329

48,517

(48,517)

Total sales

2,476,481

381,960

278,625

17,127

229,914

3,384,109

4,507

3,388,617

(48,517)

3,340,100

Operating income

41,403

21,874

16,766

548

65,551

146,142

403

146,546

(3,301)

143,244

Equity in earnings

of nonconsolidated

1,868

2,852

6,111

151

1,282

12,266

3,953

16,219

(1,128)

15,091

subsidiaries and

affiliates

Segment income

43,271

24,726

22,877

700

66,833

158,409

4,356

162,765

(4,429)

158,335

Notes:

  1. The segment "Others" refers to the total of other business segments that are not included in the reportable segments, including Showa Shell Sekiyu K.K., insurance businesses and intra-group service businesses.
  2. The amount of reconciliation for the segment income mainly represents research and development costs, which do not belong to reportable segments.
  3. The segment income of the reportable segments is reconciled to the amount of operating income and equity in earnings (losses) of nonconsolidated subsidiaries and affiliates in the consolidated quarterly statement of income.
  1. Impairment loss on fixed assets and goodwill by reportable segment

There is no significant item during the period.

11

Third Quarter of FY2019 (From April 1, 2019 to December 31, 2019)

(a) Net sales and income or loss by reportable segment

(Unit: ¥Million)

Reportable segment

Others

Total

Reconciliation

Consolidated

Basic

Functional

Power and

Petroleum

chemicals

materials

renewable

Resources

Total

energy

Net sales:

Net sales to outside

3,630,380

349,974

293,963

94,608

188,992

4,557,919

2,754

4,560,673

4,560,673

customers

Inter-segment

20,064

17,040

16,744

1,008

725

55,584

677

56,262

(56,262)

Total sales

3,650,444

367,015

310,708

95,617

189,718

4,613,503

3,432

4,616,936

(56,262)

4,560,673

Operating

income

42,779

16,867

18,991

(832)

33,798

111,605

454

112,059

(3,869)

108,190

(loss)

Equity in

earnings

(losses) of

nonconsolidated

(25,981)

1,099

1,249

332

679

(22,620)

(22,620)

1,883

(20,737)

subsidiaries and

affiliates

Segment

income

16,798

17,966

20,241

(500)

34,478

88,984

454

89,438

(1,985)

87,453

(loss)

Notes:

  1. The segment "Others" refers to the total of other business segments that are not included in the reportable segments, including insurance businesses and intra-group service businesses.
  2. The amount of reconciliation for the segment income mainly represents research and development costs, which do not belong to reportable segments.
  3. The segment income (loss) of the reportable segments is reconciled to the amount of operating income (loss) and equity in earnings (losses) of nonconsolidated subsidiaries and affiliates in the consolidated quarterly statement of income.
  1. Impairment loss on fixed assets and goodwill by reportable segment

(Significant change in goodwill)

As a result of acquiring all shares of Showa Shell on April 1, 2019, the amount of goodwill increased by ¥128,551 million and ¥42,850 million in the "Petroleum" segment and the "Power and renewable energy" segment, respectively on the same day.

(c) Matters related to changes in reportable segments etc.

As a result of the business integration with Showa Shell, effective from the first quarter of fiscal 2019, the Company's previous three reportable segments of "Petroleum products," "Petrochemical products" and "Resources" have been reclassified to the current five reportable segments of "Petroleum," "Basic chemicals," "Functional materials," "Power and renewable energy" and "Resources."

Major businesses in each segment are shown in the following table.

Reportable segment

Major businesses

Petroleum

Production, sales, import/export, trading, etc. of refined petroleum

products

Basic chemicals

Production, sales, etc. of olefin/aroma products

Functional materials

Lubricants, performance chemicals, electronic materials, high

functional asphalt, agricultural biotechnology products business, etc.

Power

and

renewable

Power generation (thermal power, solar power, wind power, etc.),

energy

sales of electricity and solar cell business

Resources

Exploration, development, production and sales of crude oil and

other energy resources such as coals

Segment information for the previous period has been reclassified and disclosed to conform to the segmentation adopted during the current fiscal year.

12

(d) Significant changes in segment assets

Primarily due to the business integration with Showa Shell, the total assets of the Idemitsu Group increased by ¥1,235,769 million from the end of the previous fiscal year to ¥4,126,077 million. The increase is mainly in the "Petroleum" segment.

  1. Significant Subsequent Events None

13

Disclaimer

Idemitsu Kosan Co. Ltd. published this content on 14 February 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 14 February 2020 08:48:12 UTC

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Financials (JPY)
Sales 2020 5 973 B
EBIT 2020 -7 383 M
Net income 2020 -24 930 M
Debt 2020 1 068 B
Yield 2020 6,41%
P/E ratio 2020 -30,2x
P/E ratio 2021 10,0x
EV / Sales2020 0,30x
EV / Sales2021 0,35x
Capitalization 744 B
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Average target price 3 267,78 JPY
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Shunichi Kito President & Representative Director
Takashi Tsukioka Chairman
Toshiaki Sagishima Managing Executive Officer-Accounting & Finance
Takashi Matsushita Director & Executive Vice President
Ryosuke Ito Independent Outside Director
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