Idemitsu Kosan Boosts FY2027 Forecast on Strong Oil Prices
Idemitsu Kosan has substantially increased its full-year profit forecast, buoyed by surging oil prices and robust performance in its overseas businesses. The revised outlook, announced November 11th, points to a significant improvement in financial results, signaling a positive trajectory for the Japanese energy company.
The company now anticipates a financial expense-excluding profit before tax of ¥2.4 trillion, a ¥1 trillion increase over its previous forecast from May 12th. This translates to an expected net profit attributable to owners of ¥1.65 trillion, a ¥750 billion increase. This substantial revision reflects the impact of higher oil prices, favorable trading conditions, and adjustments to its oil price assumptions.
Alongside the improved earnings outlook, Idemitsu Kosan announced a higher-than-expected dividend of ¥22 per share for the current year, a ¥4 increase from prior guidance. The company also outlined plans for progressive dividend increases, setting a minimum of ¥22 per share for both interim and year-end dividends from FY2027 onwards. This commitment to increasing shareholder returns underscores the company’s confidence in its future financial performance. The company is also initiating a ¥25 billion share buyback, further demonstrating its commitment to returning capital to shareholders.
Idemitsu Kosan is actively mitigating risks related to the Middle East situation by securing alternative oil sources and maintaining stable supplies. While the ongoing geopolitical instability presents challenges, the company is demonstrating resilience through diversification and proactive risk management. The company reported a 91% refinery utilization rate in the second quarter, despite ongoing issues, and is accelerating initiatives to enhance operational efficiency and reduce potential disruptions. The company is also investing in future growth areas, including solid-state batteries and chemical recycling, positioning itself for long-term sustainability.