JXTG : cuts full-year outlook to $2.7 billion loss due to slumping oil prices, pandemic

JXTG Holdings, Japan's biggest oil refiner, said on Thursday it expects a full-year net loss of 300 billion yen ($2.7 billion) as plunging oil prices cut its inventory values and the coronavirus outbreak reduced demand for oil products.

The company, which is also a copper miner and smelter, had previously expected 155 billion yen in net profit for the fiscal year ending March 31.

"We are cutting our forecast due to falling prices in oil and copper amid the spreading coronavirus outbreak and lower demand and margins of our oil and petrochemical products at home and abroad," it said in a statement.

The energy company plans to book a 250 billion yen appraisal loss on its oil and oil products inventories, 180 billion yen bigger than it had anticipated in November, it said.

Its operating profit, excluding the appraisal loss, is also expected to deteriorate by 310 billion yen from its previous forecast to 40 billion yen.

The company's margin has fallen by 130 billion yen from its earlier estimate as the pandemic slowed economic activities, including those of airlines and shippers, leading to dwindling demand in oil and petrochemical products and hammering the prices of products.

JXTG will also book an impairment loss of about 90 billion yen on its stake in oil and natural gas development projects to reflect tanking oil prices.

International benchmark oil prices have more than halved since the start of the year, falling to around $25 a barrel.

As a result, its operating profit in energy operation, excluding inventory impact, will be nil, against its earlier forecast of a 195 billion yen profit, while oil and gas development unit will see an operating loss of 50 billion yen, against its prior estimate of a 55 billion yen profit.

Profit estimate at its metal unit was also cut by 10 billion yen to 40 billion yen. Copper prices on the London Metal Exchange (LME) have lost about 22% so far this year.

The warning comes as oil and gas companies are cutting spending plans as tough global virus containment measures curb travel, slashing fuel consumption, and as a crude oil glut swells after the collapse of an OPEC+ output deal.

More than 435,300 people have been infected by the novel coronavirus across the world and 19,587 have died, according to a Reuters tally. Infections have been reported by 197 countries outside China.

(Reporting by Yuka Obayashi; Editing by Tom Hogue and Shailesh Kuber)