ENEOS : Q&A（103KB）

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• ENEOS Holdings (5020) - Analysts' Meeting Q&A for the first quarter ended June 30, 2021

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1. Date & time: Friday, August 13, 2021 (16:00 - 17:00)
2. Attendees: 136
3. Principal questions:

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－This document contains forward-looking statements. A cautionary statement appears in the endnote.－

1. What was the reason for keeping your full-year forecast unchanged?

1. In the first quarter, we posted inventory valuation income of +¥87.5 billion due to rising crude oil prices, so the progress rate of operating income including inventory valuation effects was 62%. Inventory valuation income is linked to crude oil prices, but it's unclear how prices will trend, so we didn't make any revisions. We'll consider making revisions as necessary when we release our second-quarter financial results.

1. Page 5 of the financial results presentation materials shows an improvement in the petroleum product margin, but why was there not an improvement in petroleum product income?

1. The petroleum product margin index on Page 5 is a reference value for market conditions (spot price minus All Japan Crude CIF), and there is a difference between this and our actual margin. We tend to recognize crude oil arriving in Japan as a purchase more quickly than the index data (All Japan Crude CIF), so during periods when crude oil prices are rising, we post high crude oil prices as costs earlier than the index does. As a result, our margin in the first quarter was lower than the index at such times. Conversely, when the price of crude oil is falling, our margin tends to be higher than the index.

SQ. How do you think the gap between ENEOS's margin and the index will change from the second quarter onward?

SA. We view the current gap between the index and our actual margin as being transient, and expect it to shrink from the second quarter onward.

1. Are the impacts of the refinery operation problems still ongoing?

1. There was an impact through July, but we expect it to be resolved from August onward.

1. In the Metals Business, functional and thin-film materials performed well. What is your outlook from the second quarter onward?

1. Demand remains strong in the advanced materials field. We're seeing the positive effects of bolstering facility capacity, which we completed last year. We'll keep bolstering capacity in a flexible manner in order to be able to respond to further increases in demand. We don't know if full-year profit will be four times that of the first quarter, but we do expect solid demand to continue in the second quarter and thereafter.

Copyright © 2021 ENEOS Holdings, Inc.

This document contains forward-looking statements. Actual results may differ materially from those expressed or implied by forward-looking statements due to various factors, including but not limited to the following:

1. macroeconomic conditions and changes in the competitive environment in the energy, resources, or materials industries;
2. the novel coronavirus outbreak and associated impacts on economic activity
3. revision of laws and tightening of regulations;
4. risk of lawsuits and other legal risks.

Copyright © 2021 ENEOS Holdings, Inc.