Japan Petroleum Exploration : Consolidated Financial Results for the Six Months Ended September 30, 2022(234.2 KB)

Consolidated Financial Results for the Six Months Ended September 30, 2022

November 10, 2022

Note: The following report is a summary of the Japanese-language original.
Company name: Japan Petroleum Exploration Co., Ltd.
Listing:	Prime Market, Tokyo Stock Exchange
Securities code:	1662
URL:	https://www.japex.co.jp/
Representative:	FUJITA Masahiro, Representative Director and President
Inquiries:	ASAI Masaru, General Manager, Corporate Communication Office
	TEL: [phone] (from overseas)
Scheduled date to commence dividend payments:	December 12, 2022
Scheduled date to file Quarterly Report:	November 11, 2022

Presentation of supplementary material on quarterly financial results: Yes

Holding of quarterly financial results presentation meeting (for institutional investors and analysts): Yes

(Millions of yen with fractional amounts discarded, unless otherwise noted)

1. Consolidated financial results for the six months ended September 30, 2022 (April 1, 2022 - September 30, 2022)

(1) Consolidated operating results (cumulative)			(Percentages indicate year-on-year changes.)
	Net sales			Operating profit	Ordinary profit	Profit attributable to
			owners of parent
Six months ended	Millions of yen	%		Millions of yen	%	Millions of yen	%	Millions of yen	%
September 30, 2022	120,708	1.9		19,304	102.3		43,084		122.7	31,430	-
September 30, 2021	118,507	20.8				9,540	-		19,349		-	(119,676)	-
Note: Comprehensive income:	Six months ended September	30, 2022:		34,953 million yen	(- %)
	Six months ended September 30, 2021:	(110,004) million yen	(- %)
	Basic earnings per share		Diluted earnings per share
Six months ended				Yen					Yen
September 30, 2022			573.89					-
September 30, 2021		(2,096.81)					-

1. Consolidated financial position

	Total assets		Net assets		Equity ratio
	Millions of yen		Millions of yen		%
As of September 30,	509,949		431,832		78.1
2022
As of March 31, 2022	471,941		402,770		78.7
Reference: Equity As of September 30, 2022: 398,214 million yen	As of March 31, 2022: 371,638 million yen

2. Cash dividends

				Annual dividends
		First quarter	Second quarter	Third quarter	Fiscal year-end	Annual
	Fiscal year ended	Yen	Yen	Yen	Yen	Yen
	-	25.00	-	25.00	50.00
	March 31, 2022
	Fiscal year ending	-	150.00
	March 31, 2023
	Fiscal year ending			-	150.00	300.00
	March 31, 2023
	(Forecasts)
	Note: Revisions to the latest forecasts of cash dividends: Yes
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3. Consolidated financial forecasts for the fiscal year ending March 31, 2023 (April 1, 2022 - March 31, 2023)

(Percentages indicate year-on-year changes.)

	Net sales	Operating profit	Ordinary profit	Profit attributable	Basic earnings per
	to owners of parent	share
	Millions	%	Millions	%	Millions	%	Millions	%	Yen
	of yen	of yen	of yen	of yen
Fiscal year ending	304,563	22.2	45,242 128.4	66,951	53.3	53,000	-	972.52
March 31, 2023
Note: Revisions to the consolidated financial forecasts most recently announced: Yes

• Notes

1. Changes in significant subsidiaries during the six months under review (changes in specified subsidiaries resulting in the change in scope of consolidation): Yes
   New inclusion: one company (JAPEX Insurance Ltd.)

Exclusion: one company (Canada Oil Sands Co., Ltd.)

Note: For details, please refer to "(3) Notes to quarterly consolidated financial statements (Changes in significant subsidiaries during the six months under review)" of "2. Consolidated financial statements and significant notes thereto" on page 9 of the attached material.

1. Application of specific accounting for preparing quarterly consolidated financial statements: Yes

Note: For details, please refer to "(3) Notes to quarterly consolidated financial statements (Application of specific accounting for preparing quarterly consolidated financial statements)" of "2. Consolidated financial statements and significant notes thereto" on page 9 of the attached material.

1. Changes in accounting policies, changes in accounting estimates, and restatement
2. 1. Changes in accounting policies due to revisions to accounting standards and other regulations: None
   2. Changes in accounting policies due to other reasons: None
   3. Changes in accounting estimates: None
   4. Restatement: None
3. Number of issued shares (common shares)
4. 1. Total number of issued shares at the end of the period (including treasury shares)

As of September 30, 2022	54,300,076 shares
As of March 31, 2022	57,154,776 shares

1. Number of treasury shares at the end of the period

As of September 30, 2022	73,510 shares
As of March 31, 2022	1,518,982 shares

1. Average number of shares during the period (cumulative from the beginning of the fiscal year)

Six months ended September 30, 2022	54,766,817 shares
Six months ended September 30, 2021	57,075,423 shares

• Quarterly financial results reports are exempt from quarterly review conducted by certified public accountants or an audit corporation.
• Proper use of financial forecasts, and other special matters
  The forward-looking statements, including the financial forecasts shown in this document are based on information currently available to our company and on certain assumptions deemed to be reasonable. As such, they do not constitute guarantees by our company of future performance. Actual performance and other results may differ materially from these forecasts due to various factors.
  For the suppositions that form the assumptions for financial forecasts and cautions concerning the use thereof, please refer to "(3) Explanation of consolidated financial forecasts and other forward-looking statements" of "1. Qualitative information regarding settlement of accounts for the six months ended September 30, 2022" on page 4 of the attached material to the quarterly financial results report.

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(Attached Material)

1. Qualitative information regarding settlement of accounts for the six months ended September 30, 2022

(1) Explanation of operating results

During the six months ended September 30, 2022, net sales was ¥120,708 million, an increase of ¥2,200 million (+1.9%) year on year. Gross profit was ¥33,980 million, an increase of ¥8,195 million (+31.8%) year on year. Main factors behind the year-on-year increase for net sales and increase for gross profit include a rise in the selling prices of crude oil and natural gas in Japan as a result of the rising price of crude oil and LNG, despite the absence of sales of diluted bitumen as a result of the transfer of all the shares of Japan Canada Oil Sands Limited (JACOS), which had been a consolidated subsidiary to promote the oil sands project in Canada in the previous fiscal year.

Exploration expenses was ¥1,140 million, an increase of ¥887 million (+351.6%) year on year. Selling, general and administrative expenses was ¥13,535 million, a decrease of ¥2,455 million (-15.4%) year on year. As a result, operating profit increased by ¥9,764 million year on year to ¥19,304 million.

Ordinary profit increased by ¥23,734 million year on year to ¥43,084 million, due mainly to an increase in foreign exchange gains and a recording of gain on valuation of derivatives.

Profit before income taxes improved by ¥162,383 million year on year to ¥43,068 million (loss before income taxes of ¥119,315 million in the same period of the previous fiscal year) due mainly to the absence of loss on sale of shares of subsidiaries resulting from the transfer of all the shares in JACOS in the same period of the previous fiscal year, and loss on transfer of interests resulting from the transfer of JAPEX Montney Ltd.'s interest in the shale gas project of North Montney Area in British Columbia, Canada. Profit attributable to owners of parent improved by ¥151,106 million year on year to ¥31,430 million (loss attributable to owners of parent of ¥119,676 million in the same period of the previous fiscal year).

Below is a breakdown of net sales.

1. E&P Business
   Net sales from the E&P Business came to ¥14,142 million, a decrease of ¥35,678 million (-71.6%) year on year, mainly due to the absence of the sales of diluted bitumen resulting from the transfer of all the shares of JACOS, despite a rise in the selling price of crude oil.
2. Infrastructure/Utility Business
   Net sales from the Infrastructure/Utility Business came to ¥76,779 million, an increase of ¥30,397 million (+65.5%) year on year. This was mainly the result of a rise in the selling prices of natural gas (Japan) and electricity due to the rising crude oil price and LNG price, despite the decreased sales volume for electricity.
3. Other Businesses
   Net sales from other businesses, such as the contract services (drilling and geological surveys, etc.), sale of oil products, including liquefied petroleum gas (LPG), fuel oil and the like, as well as other subcontracted tasks, came to ¥29,786 million, an increase of ¥7,482 million (+33.5%) year on year.

(2) Explanation of financial position

At the end of the second quarter, total assets increased by ¥38,007 million from the previous fiscal year- end to ¥509,949 million.

Current assets increased by ¥10,884 million from the previous fiscal year-end. This was due to an increase in cash and deposits despite a decrease in notes and accounts receivable - trade, and contract assets. Non- current assets increased by ¥27,123 million from the previous fiscal year-end. This was mainly due to an increase in recoverable accounts included in other under investments and other assets, the recording of construction in progress under property, plant and equipment, and other factors.

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Liabilities increased by ¥8,945 million from the previous fiscal year-end to ¥78,117 million.

Current liabilities increased by ¥9,980 million from the previous fiscal year-end. The main factor was an increase in income taxes payable. Non-current liabilities decreased by ¥1,034 million from the previous fiscal year-end. This was mainly due to a decrease in deferred tax liabilities resulting from the fall in market values of investment securities and other factors.

Net assets increased by ¥29,061 million from the previous fiscal year-end to ¥431,832 million. The main factors were increases in foreign currency translation adjustment and retained earnings.

(3) Explanation of consolidated financial forecasts and other forward-looking statements

The consolidated financial forecasts for the fiscal year ending March 31, 2023 have been revised from the forecasts announced on August 9, 2022.

Please refer to the "Notice of Financial Forecasts Revision, Recording of Non-operating Income, Interim Dividend Payout and Dividend Forecast Revision" disclosed on November 10, 2022, the same day of this report.

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2. Consolidated financial statements and significant notes thereto

(1) Consolidated quarterly balance sheet

			(Millions of yen)
		As of March 31, 2022	As of September 30, 2022
Assets
Current assets
Cash and deposits	147,241	176,455
Notes and accounts receivable - trade, and contract	47,564	29,567
assets
Securities	3,030	3,000
Merchandise and finished goods	2,143	2,447
Work in process	29	143
Raw materials and supplies	12,503	15,596
Other	14,458	10,646
Allowance for doubtful accounts	(51)	(51)
Total current assets	226,920	237,804
Non-current assets
Property, plant and equipment	92,837	104,084
Intangible assets	5,802	5,895
Investments and other assets
Investment securities	108,910	108,750
Other	37,812	53,757
Allowance for doubtful accounts	(45)	(45)
Allowance for overseas investment loss	(297)	(297)
Total investments and other assets	146,380	162,165
Total non-current assets	245,021	272,144
Total assets		471,941	509,949

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