Idemitsu Kosan : Consolidated Financial Results for the Fiscal Year 2020

May 11, 2021

Consolidated Financial Results for the Fiscal Year 2020

(From April 1, 2020 to March 31, 2021) [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: Munehiro Sekine, General Manager, Investor Relations Office, Finance Department

Telephone: [phone]

Scheduled date of ordinary general meeting of shareholders: June 23, 2021

Scheduled date of commencement of dividend payments: June 2, 2021

Scheduled date of filing of Securities Report: June 23, 2021

Supplemental materials for the financial results: Yes

Financial results presentation: Yes (for institutional investors and analysts)

(Figures less than ¥1 million are rounded off)

1. Consolidated Financial Results for FY2020 (From April 1, 2020 to March 31, 2021)

(1) Consolidated operating results			(Percentages represent changes from prior year)
	Net sales		Operating income		Ordinary income		Net income attributable
				to owners of the parent
	¥million		%	¥million	%		¥million		%	¥million	%
FY2020	4,556,620		(24.6)	140,062	－		108,372		－	34,920	－
FY2019	6,045,850		36.6	(3,860)	－		(13,975)		－	(22,935)	－

Notes: Comprehensive income FY2020	¥44,120 million (－%) FY2019	¥(40,480) million (－%)
	Net income per	Diluted net	Return on	Ratio of ordinary	Ratio of operating
	income per	income to total	income to net
	share	equity
		share		assets	sales
	¥		¥	%		%	%
FY2020	117.47		－	3.0		2.8	3.1
FY2019	(76.31)		－	(2.3)		(0.4)	(0.1)
Reference: Equity in earnings (losses) of nonconsolidated subsidiaries and affiliates FY2020	¥(39,789) million
						FY2019	¥(22,358) million

(2) Consolidated financial position

	Total assets	Net assets	Equity ratio	Net assets per share
		¥million	¥million	%	¥
FY2020		3,954,443	1,215,136	29.1	3,871.69
FY2019		3,886,938	1,200,564	29.6	3,868.68
Reference: Total equity	FY2020 ¥1,150,930 million	FY2019 ¥1,150,009 million

(3) Consolidated cash flows

	Cash flows from	Cash flows from	Cash flows from	Cash and cash
	equivalents at the end of
	operating activities	investing activities	financing activities
	period
	¥million	¥million	¥million	¥million
FY2020	170,466	(109,851)	(56,227)	130,956
FY2019	(32,712)	(134,463)	157,907	129,335

2. Dividends

		Cash dividends per share			Total	Payout ratio		Dividends on
	As of	As of	As of	As of			dividend		equity ratio
	Total		(Consolidated)
	Jun.30	Sep.30	Dec.31	Mar.31		amount	(Consolidated)
	¥	¥	¥	¥	¥		¥million	%	%
FY2019	－	80.00	－	80.00	160.00	47,980	－	4.8
FY2020	－	60.00	－	60.00	120.00	35,740	102.2	3.1
FY2021	－	60.00	－	60.00	120.00			42.0
(Forecast)

Notes: "Payout ratio (Consolidated)" is calculated by dividing total dividends of common stock by net income attributable to owners of the parent.

"Dividends on equity ratio (Consolidated)" is calculated by dividing total dividends of common stock by an average of total equity balances at the beginning of period and at the end of period.

3. Forecasts of Consolidated Financial Results for FY2021 (From April 1, 2021 to March 31, 2022)

(Percentages represent changes from prior year)

				Operating			Net income	Net income
	Net sales		Ordinary income	attributable to
		income		per share
							owners of the parent
	¥million		%	¥million		%	¥million	%	¥million	%	¥
FY2021	5,680,000		24.7	135,000		(3.6)	140,000	29.2	85,000	143.4	285.94

* Notes

1. Changes of number of material consolidated subsidiaries during the fiscal year: None
2. Changes in accounting policies and accounting estimates, or restatement
3. 1. Changes in accounting policies arising from revision of accounting standards: None
   2. Changes arising from other factors: None
   3. Changes in accounting estimates: None
   4. Restatement: None
4. Number of shares issued (common stock)
5. 1. Number of shares issued (including treasury stock)

As of March 31, 2021:	297,864,718	As of March 31, 2020: 297,864,718
b) Number of shares of treasury stock
As of March 31, 2021:	596,197	As of March 31, 2020:	603,227
c) Weighted average number of shares outstanding during the period
FY2020:	297,269,637	FY2019:	300,558,642

(Reference)

1. Nonconsolidated Financial Results for FY2020 (From April 1, 2020 to March 31, 2021)

(1) Nonconsolidated operating results				(Percentages represent changes from prior year)
		Net sales		Operating income	Ordinary income		Net income
		¥million		%		¥million		%	¥million		%			¥million		%
FY2020	3,435,415		(19.9)		96,465		－	140,810		960.6		96,760		－
FY2019	4,290,578		38.9		(80,065)		－	13,276		(81.0)		(56,784)		－
	Net income per share	Diluted net income
		per share
				¥				¥
FY2020		325.48				－
FY2019		(188.92)				－
(2) Nonconsolidated financial position
		Total assets			Net assets		Equity ratio				Net assets per share
		¥million		¥million			%				¥
FY2020		3,233,323		941,701			29.1				3,167.66
FY2019		3,201,214		881,292			27.5				2,964.53
Reference: Total equity	FY2020 ¥941,701 million	FY2019 ¥881,292 million

• This document is out of the scope of audit performed by certificated public accountants or audit firms.
• The financial forecasts in this document are based on information currently available and certain assumptions deemed reasonable. Actual operating results may differ from these forecasts due to various factors. Additionally, for the assumptions used for the forecasts of the financial results, please refer to page 8 "Forecasts of consolidated financial results for FY2021" of the Appendix.

	Contents of the Appendix
1. Overviews Concerning Operating Results and Financial Positon………………………………………………………….....	2
(1)	Overview Concerning Operating Results…………………………………………………………………….…….........	2
(2)	Overview Concerning Financial Position………………………………………………………………….……..…......	9
(3)	Basic Policy on Distribution of Profits/Dividends for FY2020 and FY2021……………………………….……….....…	11

2. Description of Idemitsu Group.……..……………………………………………………………………………………..…. 12

3. Principal Policy for Selecting Financial Reporting Framework………………………………………………….………..… 13

4. Consolidated Financial Statements and Major Notes………………………………………………………………….…..…. 14

1. Consolidated Balance Sheets.…………………………………………………………………………………………...... 14
2. Consolidated Statements of Income and Comprehensive Income………………………………………………………... 16
3. 1. Consolidated Statements of Income………………………………………………………………………………….. 16
   2. Consolidated Statements of Comprehensive Income…..…………………………………………………………….. 17

(3) Consolidated Statements of Changes in Net Assets…………………………………………………………………….… 18

1. Consolidated Statements of Cash Flows …………………………………………………………………………………. 21

(5) Notes to Consolidated Financial Statements………………………………………………………………………………	23
(Notes on the Assumption of a Going Concern)...	23
(Notes to Consolidated Balance Sheets) …………………………………………………………………………………...	23
(Notes to Consolidated Statements of Comprehensive Income)…………………………………………………………...	25
(Notes to Consolidated Statements of Changes in Net Assets)…………………………………..………………………...	26
(Notes to Consolidated Statements of Cash Flows)………………………………………………………………………...	29
(Segment and Related Information)………………………………………………………………………………………...	30
(Other Notes to Consolidated Financial Statements)..………………………………………………….………………….	34
(Per Share Information)…………………………………………………………………………………………………….	34
(Significant Subsequent Events)…………………………………………………………………………………..……….	35
5. Nonconsolidated Financial Statements……..…………………………………………………………………………………	36

1. Nonconsolidated Balance Sheets………..…………………………………………………………………………….….. 36

(2) Nonconsolidated Income Statements…….……………………………………………………………………………..…	38
(3) Nonconsolidated Statements of Changes in Net Assets…..…………………………………………………………….…	39

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[Appendix]

1. Overviews Concerning Operating Results and Financial Position

1. Overview Concerning Operating Results

1. General economic conditions and environment surrounding the Idemitsu Group

The Japanese economy in the current consolidated fiscal year slowed significantly in the first quarter, due to the issuance of a state of emergency caused by the spread of COVID-19. Economic activities resumed afterward, and the economy continued to recover gradually until autumn, but it stagnated after the beginning of 2021 due to a resurgence in the spread of COVID-19.

Domestic petroleum products sales volume fell below the previous year's level overall due to a significant decrease in jet fuel demand caused by suspension and reduction of flights, and due to a decrease in gasoline demand caused by the effects of refraining from going out.

Dubai crude oil prices plummeted in the early spring due to the collapse of the so-calledOPEC-plus alliance's production cut talks and the spread of COVID-19, but returned to a recovery trend owing to the resumption of economic activities in major countries and the resumption of cooperative production cuts by the OPEC-plus alliance. After June 2020, the price largely hovered around $40/bbl. Since November, Dubai crude oil prices have been on an upward trend owing to expectations for widespread use of COVID-19 vaccines and for a recovery in the US economy, and due to the production cut agreement by the OPEC-plus alliance. Consequently, the average price of Dubai crude oil was $44.5/bbl, a decrease of $15.8/bbl against the previous fiscal year.

The yen's exchange rate against the US dollar generally ranged from ¥105 to ¥108 in the first half of the fiscal year. Thereafter, the yen appreciated to the ¥102 level due to an increase in the number of people infected with COVID-19 around the world. Since February 2021, the dollar has been strong against the backdrop of rising long-term interest rates owing to expectations for the normalization of the US economy, and the yen temporarily fell to the ¥110 level toward the end of the fiscal year. Consequently, the average rate fell by ¥2.6/$ from the previous fiscal year to ¥106.1/$.

2) Operating results

The Idemitsu Group's net sales for fiscal 2020 were ¥4,556.6 billion, down 24.6% from the previous fiscal year, mainly due to the decline of crude oil prices and a decrease in the sales volume.

Cost of sales was ¥3,997.6 billion, down 29.0% year on year. Selling, general and administrative expenses totaled ¥419.0 billion, up 0.5% year on year.

Operating income was ¥140.1 billion, up ¥143.9 billion from the previous fiscal year, due to the effect of inventory valuation, which turned from a loss of ¥89.3 billion in the previous fiscal year to a profit of ¥7.5 billion, and an increase in profits in the petroleum products segment.

Net non-operating loss was ¥31.7 billion, owing primarily to recording equity in losses of nonconsolidated subsidiaries and affiliates, an increase of ¥21.6 billion from the

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