Financial Highlights for the Third Quarter of FY2006

Transcription

1 Financial Highlights for the Third Quarter of FY2006 (April 1, December 31, 2006) February 6, 2007 Idemitsu Kosan Co.,Ltd.

2 Contents 1. Business Results for the Third Quarter of FY (1) Outline (2) Business segment information 2. Forecast for FY (1) Outline (2) Business segment information (3) Forecast for FY2006 ( Comparison with those published on November 14, 2006 ) 3. Topics 14 (1) Major activities for the 3rd QTR of FY2006 (2) Others 4. Reference Data 17

3 1. Business Results for the Third Quarter of FY2006 Note : the Third Quarter of FY2006 in this material refers to April 1, December 31, 2006.

4 (1) Outline 1) Crude oil price and Foreign exchange rate 3rd QTR, FY2005 3rd QTR, FY2006 (Unit: $/bbl; Yen/$) Change Crude oil price (DB, FOB) Exchange rate (TTS) ) Summary of Consolidated Statement of Income * Figures in the table above are rounded off by ten million. * The valuation of inventory is based on the LIFO method. 3rd QTR, FY2005 3rd QTR, FY2006 (Unit: 100 million) Change Net sales 23,856 25,169 +1,313 Operating income (including equity earnings in affiliated companies) (750) (949) (+199) Non-operating income/expenses Ordinary income Extraordinary gains/losses Net income for 3rd QTR

5 (2) Business segment information 1) Net sales (Unit: 100 million) 3rd QTR, FY2005 3rd QTR, FY2006 Change Petroleum Products 18,114 18, Petrochemical Products 4,123 4, Oil Exploration and Production Others 1, [ Causes for increase/decrease ] Total 23,856 25,169 +1,313 Petroleum Products: Petrochemical Products: Oil Exploration and Production: Others: Price factors: billion; spin-off of LPG business: 134.1billion Price factors Price factors Coal in Australia 4

6 (2) Business segment information 2) Operating income (Unit: 100 million) 3rd QTR, FY2005 3rd QTR, FY2006 Change Petroleum Products Petrochemical Products Oil Exploration and Production Others Total

7 (2) Business segment information 3)Analysis of causes for increase/decrease in operating income UNIT : 100 million time lag supply cost +57 cost reduction margin margin refinig cost production cost maintenance price factor volume factor Petroleum products seg. Petrochemical products seg. Oil exploration & production seg. Other seg the 3rd QTR, FY The 3rd QTR, FY2006 6

8 2. Forecast for FY2006

9 (1) Outline 1) Crude oil price and Foreign exchange rate FY2005 FY2006 (Forecasted) (Unit: $/bbl; Yen/$) Change Crude oil price (DB, FOB) Exchange rate (TTS) * Assumptions for the Jan.-Mar. of FY2007 : Crude oil price: $52/bbl; Exchange rate: 120/$ 2) Summary of Consolidated Statement of Income (Unit: 100 million) FY2005 FY2006 (Forecasted) Change Net sales 33,274 33, Operating income 714 1, (including equity earnings in affiliated companies) (764) (1,098) (+335) Non-operating income/expenses Ordinary income 708 1, Extraordinary gains/losses Net income for the year * The valuation of inventory is based on the LIFO method. 8

10 (2) Business segment information 1) Net sales (Unit: 100 million) FY2005 FY2006 (Projected) Change Petroleum Products 25,525 24, Petrochemical Products 5,507 6, Oil Exploration and Production Others 1,527 1, Total 33,274 33, [ Causes for increase/decrease ] Petroleum Products: Petrochemical Products: Sales volume factors: billion; price factor: billion; spin-off of LPG business: billion Sales volume factors: 6.3 billion; price factor: billion Oil Exploration and Production: Sales volume factors: 2.2 billion; price factors: billion Others: Coal in Australia 9

11 (2) Business segment information 2) Operating income (Unit: 100 million) FY2005 FY2006 (Forecasted) Change Petroleum Products Petrochemical Products Oil Exploration and Production Others Total 714 1,

12 (2) Business segment information 3) Analysis of causes for increase/decrease in operating income UNIT : 100 million time lag cost reduction margin supply cost refinig cost margin maintenance volume factor price factor +42 cost on disused mine 48 production cost Petroleum products seg. Petrochemical products seg. Oil exploration & production seg. Other Seg FY2005 FY

13 (3) Forecast for FY2006 (Comparison with those published on November 14, 2006) 1) Crude oil price and foreign exchange rate, and the summary of the consolidated statement of income for FY2006 Forecasts, previously published (Unit: $/bbl; Yen/$: 100 million) Current forecast Change Dubai crude oil price Exchange rate Net sales 33,900 33, Operating income 940 1, Ordinary income 900 1, Net income ) Operating income by business segment (Unit: 100 million) Forecasts, previously published Current forecast Change Petroleum products Petrochemical products Oil exploration and development Others Total 940 1,

14 (4) Informatin of Stratigic segments Operating income (unit: 100 million) FY2004 FY2005 FY2006(forecast) FY2006 ( ) Core businesses High value-added businesses (ratio) (13.4%) (21.4%) (16.2%) (20.0%) Resource businesses Total 1, ,098 1,100 Note : including Idemitsu s share in the net income of affiliates that are accounted for under the equity method ( ) Mid-term Management plan 13

15 3. Topics

16 (1) Major activities for the 3rd QTR of FY2006 November 2006 : Capital participation in Laffan Refinery Co., Ltd. of Qatar. December 2006 : Idemitsu acquires Nitto Denko s Pest-Control business. - Agribio Business expands into Crop Protection and Greening - Opened Japan s first hydrogen station with gas station attached in Ichihara shi, Chiba Prefecture. Agreement with Universal Display Corporation (UDC) in the United States on joint development of electro-luminescence (EL) materials. Development Plan for Vega South fields in Norwegian North Sea submitted to Norwegian Government. January 2007 : First procurement in Japan of Azeri Crude Oil produced in the Republic of Azerbaijan. Over 1,500,000 Idemitsu Mydo Plus Cards have been issued. February 2007 : Acquisition of interests in 2 mining blocks through public tender in Norwegian North Sea. 15

17 (2) Others Concerning the Situation following the Flood at Cigar Lake uranium mine in Canada 1) Restorative construction progress The operator(cameco Corporation) commenced restorative construction in November, At present, boring into the flooded area and cementing is in progress as the first stage of restorative construction, and water stoppage construction is scheduled to end during the period between April and June This will be followed by drainage, mine-shaft restorative construction and the recommencement of mine construction. 2) Future Schedule In accordance with Canadian Securities Reporting Regulations, the operator is scheduled to submit a technical report in second half of March 2007, and this report is expected to contain such information as the restorative construction schedule and investment expenditures estimates. 16

18 4. Reference Data

19 (1) Achievement of Mid - term Management Plan Major Financial Index FY2005 FY2006 (Targeted in management plan) (Unit: 100 million) FY2006 (Forecasted) Operating income (including equity 764 1,100 1,098 earnings in affiliated companies) (Operating income) (714) (1,060) (1,020) Ratio of return on investment (ROI) 5.5% 8.0% 7.9% Net Debt/Equity ratio (%) Shareholders equity ratio 16.2% 23.0% 22.0% Assumptions FY2005 FY2006 (Targeted in management plan) (Unit: $/bbl; Yen/$) FY2006 (Forecasted) Crude oil price (DB, FOB) Exchange rate (TTS)

20 (2) Sales 1) Sales volume for the 3rd QTR of FY2006 (Domestic sales volume of fuel oil, nonconsolidated) (Unit: Thousand KL, %) 3rd QTR, FY2005 3rd QTR, FY2006 Change Growth rate Gasoline 6,605 6, (Super-unleaded) 1,089 1, (Regular-unleaded) 5,516 5, Naphtha Jet fuel 1,356 1, Kerosene 2,288 2, Diesel oil 4,773 4, Fuel oil A 2,993 2, Fuel oil C 2,218 2, Sub Total 20,633 19,

21 (2) Sales 2) Sales volumes of petrochemicals products and others for the 3rd QTR of FY2006 (Non-consolidated) (Unit: Thousand KL; Thousand ton: %) 3rd QTR, FY2005 3rd QTR, FY2006 Change Growth rate Petrochemical products 2,706 2, Fuel oil for exports 2,435 2, Lubricants Coals 4,174 3, Others 2,725 2, Sub Total 12,583 11,213 1, TOTAL 33,216 31,197 2,

22 (2) Sales 3) Forecasts for sales volume for FY2006 (Domestic sales volume of fuel oil, nonconsolidated) (Unit: Thousand KL; %) FY2005 FY2006 (Forecasted) Change Growth rate Gasoline 8,647 8, (Super-unleaded) 1,411 1, (Regular-unleaded) 7,236 7, Naphtha Jet fuel 1,802 1, Kerosene 4,020 3, Diesel oil 6,285 6, Fuel oil A 4,338 3, Fuel oil C 3,015 2, Sub Total 28,607 27,519 1,

23 (2) Sales 4) Forecasts for sales volume of petrochemical products and others for FY2006 (Non-consolidated) (Unit: Thousand KL; Thousand ton; %) FY2005 FY2006 (Forecasted) Change Growth rate Petrochemical products 3,648 3, Fuel oil for exports 2,912 2, Lubricants Coals 5,816 5, Others 4,051 3, Sub Total 17,149 15,540 1, TOTAL 45,756 43,059 2,

24 (2) Sales 106.0% 5) Growth rate of the domestic sales volumes of gasoline (Subjects: service stations with Idemitsu brand) 104.0% 104.0% 102.0% 101.7% 100.8% 101.2% 101.7% 100.1% 100.0% 98.0% 99.1% 98.8% 100.5% 101.5% 99.9% 99.0% 96.0% 94.0% FY2001 FY2002 FY2003 FY2004 FY2005 3rd QTR of FY2006 Year Demand for the 3rd QTR of FY2006 is based on the data in the Structural Survey of Energy Consumption. Final figures of the Ministry of Economy, Trade and Industry for April to November 2006, and data in the Preliminary Structural Survey of Energy Consumption for December Domestic demand Idemitsu 23

25 (2) Sales 6) Sales of lubricants (including those by overseas licensees) (Thousand KL) Historical sales volumes of lubricants 1, FY2001 FY2002 FY2003 FY2004 FY2005 FY2006 (forecasted) 24

26 ($/B) 80.0 (3) Crude oil price Dubai Brent April 2001 April 2002 April 2003 April 2004 April 2005 April 2006 Dec

27 (4) Market prices ( /KL) 90,000 1) Gasoline,Crude oil and Spread ( /KL) 40,000 80,000 70,000 Spread (right scale) Regular gasoline retail price (left scale) Crude oil price, customs value, CIF (left scale) 38,000 36,000 60,000 50,000 40,000 30,000 34,000 32,000 30,000 28,000 26,000 20,000 24,000 10,000 22, ,000 April 2001 April 2002 April 2003 April 2004 April 2005 April 2006 Dec.2006 Note: Gasoline prices are based on data of The Oil Information Center 26

28 ($/t) 1,600 (4) Market prices 2) Paraxylene,Naphtha and Spreads ($/t) 1,000 1,400 1,200 1,000 Spread (right scale) Naphtha (left scale) Paraxylene (left scale) April 2001 April 2002 April 2003 April 2004 April 2005 April 2006 Dec

29 ($/t) 1,600 1,400 1,200 1,000 (4) Market prices 3) Styrene monomer,benzene and Spreads Spread (right scale) Benzene (left scale) Styrene monomer (left scale) ($/t) April 2001 April 2002 April 2003 April 2004 April 2005 April 2006 Dec

30 (4) Market prices ($/t) ) Coal price (Australian spot price) April 2001 April 2002 April 2003 April 2004 April 2005 April 2006 Dec

31 (1000 BD) (5) Production 1) Refining capacity and Operating rate Refining capacity Operating rate 91.9% % 92% % 88.1% 87% % 82% % % 77.2% 77% % 73.3% FY2001 FY2002 FY2003 FY2004 FY % Oct.-Dec.2005 Oct.-Dec.2006 April-sep.2005 April-sep

32 (5) Production 2) Production of major petrochemical products and equipment operating ratio Production Ethylene Paraxylene Styrene monomer Ethylene (Unit: Thousand ton; %) Equipment operating ratio Paraxylene * Production of styrene monomer includes that produced by Idemitsu SM (Malaysia). Styrene monomer FY2003 1, FY FY2005 1, (3rd QTR, FY2005) (795) (379) (617) (95.7) (97.8) (98.7) 3rd QTR, FY

33 (5) Production 3) Oil Exploration & Production and Growth rate (Thousand bbl per day) FY2004 FY2005 3rd QTR, FY2006 FY2006 (Forecasted) Production (Growth rate on year-onyear basis) - (78.5%) - (87.7%) *Figures in the table above are on the portion of the Idemitsu Petroleum Norge s interests basis. 4) Coal production and Growth rate (Thousand ton) FY2004 FY2005 3rd QTR, FY2006 FY2006 (Forecasted) Ensham (85%) 6,859 7,142 4,825 6,615 Muswellbrook 1,473 1, ,291 Boggabri Total production 8,332 8,190 5,879 8,403 (Growth rate on year-onyear basis) - (98.3%) - (102.6%) * Figures in the table above are on the portion of the Idemitsu Group s interests basis. 32

34 (6) Others 1) Total number of service stations with Idemitsu brand 6,500 6,000 5,896 5,500 5,624 5,508 5,358 5,249 5,134 5,000 4,500 4,000 3,500 3,000 End of FY2001 End of FY2002 End of FY2003 End of FY2004 End of FY2005 End of 3rd QTR, FY

35 (6) Others 2) Self-service stations with Idemitsu brand % 500 Number of self-service station (left scale) Ratio of self-service station (right scale) % 10% % 8% % 300 6% % 200 4% 3.8% % 2% 0 End of FY2001 End of FY2002 End of FY2003 End of FY2004 End of FY2005 End of 3rd QTR, FY2006 0% 34

36 (6) Others 3) Idemitsu s card members (Unit: Thousand cards) End of March 2005 End of September 2005 End of March 2006 End of December 2006 Mydo Plus Card 884 1,059 1,291 1,559 Idemitsu Card Total 1,844 1,973 2,177 2,410 35

37 (6) Others 4) Improvement in financial structure (Part 1) Historical data of interest-bearing debt and net debt/equity ratio ( 100 million) (%) 18,000 17, ,000 14,000 15,419 14,384 13,117 Balance of interest-bearing debt (left scale) Net D/E ratio (right scale) ,000 10,000 12,285 10,969 9, , , , ,000 2, FY1999 FY2000 FY2001 FY2002 FY2003 FY2004 FY2005 FY2006 (Forecasted)

38 (6) Others 5) Improvement of financial structure (Part 2) ( 100 million) 6,000 Historical data of shareholders equity 22.0% 25% 5,000 Shareholders equity (left scale) Shareholders equity ratio (right scale) 20% 4, % 3, % 12.6% 13.6% 13.2% 15% 10% 2, % 1, % 5% ,198 2,830 2,961 3,103 2,943 3,687 5,057 0% FY1999 FY2000 FY2001 FY2002 FY2003 FY2004 FY2005 FY2006 (Forecasted) * Data for FY2006 (Forecasted) are based on the new definition of net assets and shareholder s equity under the Corporations Act. 37

39 (6) Others 6) Breakdown of extraordinary gains/losses (Unit: 100 million) (Unit: 100 million) Extraordinary gains Extraordinary losses 3rd QTR FY2005 3rd QTR, FY2006 Change FY2005 FY2006 Change Gain on sale of fixed assets Gain on sale of fixed assets Gain on sale of investment Gain on sale of investment securities securities Gain on transfer of businesses Gain on transfer of businesses Others Others Total Total Impairment loss on fixed assets Loss on sale and disposal of fixed assets Loss on sales and disposal of fixed assets Impairment loss on fixed assets Loss on sale of affiliates stocks Loss on sale of affiliates stocks Others Others Total Total Total extraordinary gains/losses Total extraordinary gains/losses Extraordinary gains Extraordinary losses 38

40 Classification of Business Segments Relation between business segments and strategic categories Business segments Petroleum Products Petrochemical Products Oil Exploration & Production Others Strategic Categories Core Businesses High Value-Added Businesses Resource Businesses Fuel products LPG Crude oil shipping Lubricants Basic chemicals Performance chemicals Engineering plastics Plastics processed products Oil exploration & production Insurance sales Service station - relatrd products Credit cards Electronic materials Agricultural biotechnology Engineering Coal Uranium Geothermal energy 39

41 Cautionary warnings about forecasts Of information about forecasts for the Company s operating results, management strategy and management policy contained in this document, any information which is not a historical fact is prepared according to decisions made by the top management of the Company based on information available as of the publication of the document. Actual business environments contain potential risk factors and uncertainties including economic situations, crude oil prices, trends in petrochemical products, markets conditions, currency exchange rates and interest rates. Consequently, actual operating results of the Company may substantially differ from forecasts due to changes in important factors mentioned above.

42 End Idemitsu Kosan Co.,Ltd.