Idemitsu Kosan (5019): FY2025 Results Summary — Net Income Rises 65% on Time-Lag Gains, IFRS Transition Reshapes FY2026 Outlook

This article is based on publicly available IR materials and is not a recommendation to buy or sell any specific securities.

Idemitsu Kosan reported FY2025 (fiscal year ended March 31, 2026) consolidated results with net sales of JPY8,105.9bn, down 11.8% YoY on lower crude oil and coal prices, while net income attributable to owners of the parent rose 65.2% YoY to JPY171.9bn (JPY192.3bn excluding inventory impact, +54.1% YoY). Operating + equity income excluding inventory impact increased 13.7% YoY to JPY244.1bn, driven mainly by a large positive time-lag impact of +JPY96.7bn following the sharp rise in crude oil prices in March, and an improvement in the Power and Renewables segment, despite falling coal prices. The company decided a JPY25.0bn share buyback on May 12 and set a full-year dividend of JPY36 per share.

Consolidated Results (Full-Year Actual)

Operating income rose JPY50.0bn (+30.8%) YoY to JPY212.2bn, while equity income fell JPY20.1bn (-88.9%) YoY to JPY2.5bn. Operating + equity income excluding inventory impact was JPY244.1bn, up JPY29.4bn (+13.7%) YoY. Ordinary income increased JPY14.8bn (+6.9%) YoY to JPY229.6bn, and extraordinary losses narrowed to JPY7.5bn from JPY56.4bn in FY2024, contributing to the sharp rise in net income.

Item	FY2025	FY2024	Change
Net Sales (¥bn)	8,105.9	9,190.2	(1,084.3) (11.8%)
Operating Income (¥bn)	212.2	162.2	+50.0 +30.8%
Inventory Impact (¥bn)	(29.4)	(29.9)	+0.5 －
Equity Income (¥bn)	2.5	22.6	(20.1) (88.9%)
Operating + Equity Income (¥bn)	214.7	184.8	+29.9 +16.2%
Operating + Equity Income, Excl. Inventory Impact (¥bn)	244.1	214.7	+29.4 +13.7%
Ordinary Income (¥bn)	229.6	214.8	+14.8 +6.9%
Extraordinary Income/Losses (¥bn)	(7.5)	(56.4)	+48.9 －
Net Income Attributable to Owners of the Parent (¥bn)	171.9	104.1	+67.8 +65.2%
Net Income, Excl. Inventory Impact (¥bn)	192.3	124.8	+67.5 +54.1%

Segment Results

By segment (operating + equity income, excluding inventory impact, YoY), Petroleum was the primary driver of the profit increase, up JPY55.1bn to JPY207.1bn, reflecting the time-lag swing (previous year JPY-18.5bn to this year +JPY78.2bn) and export gains of +JPY44.9bn (volume +JPY3.2bn, price +JPY41.6bn), partly offset by a JPY25.8bn decline in domestic margin, a JPY16.2bn hit from lower sales volume, and higher shutdown-maintenance and procurement costs (JPY20.7bn and JPY23.7bn respectively). Functional Materials rose JPY5.2bn to JPY33.4bn on favorable overseas lubricants business and the addition of Agro-Kanesho to the Agri-life business, and Power and Renewables improved JPY10.5bn to JPY-1.8bn on the reversal of prior-year equipment problems. The Resources segment declined JPY44.2bn to JPY33.1bn, with Coal down JPY39.6bn to JPY19.1bn (price -JPY36.0bn, costs -JPY3.5bn, volume -JPY2.7bn, partly offset by exchange rate +JPY2.6bn) and Oil E&P down JPY4.6bn to JPY14.0bn.

Segment	FY2025	FY2024	Change
Petroleum (¥bn)	207.1	152.0	+55.1
Basic Chemicals (¥bn)	(6.8)	(8.0)	+1.1
Functional Materials (¥bn)	33.4	28.2	+5.2
Power and Renewables (¥bn)	(1.8)	(12.3)	+10.5
Resources (¥bn)	33.1	77.4	(44.2)
Oil E&P (¥bn)	14.0	18.7	(4.6)
Coal (¥bn)	19.1	58.7	(39.6)
Others (¥bn)	(20.9)	(22.7)	+1.7
Total (¥bn)	244.1	214.7	+29.4

FY2026 Forecast

FY2026 forecasts assume the Strait of Hormuz reopens to navigation from 2Q onward, with Dubai crude averaging $100.0/bbl in 1Q, $80.0/bbl in 2Q and 3Q, and $65.0/bbl in 4Q ($81.3/bbl for the full year), up from $71.8/bbl in FY2025, before declining to pre-Middle East-crisis levels in 4Q. Domestic margin is predicted at the same level as FY2025 excluding time-lag. Idemitsu will adopt IFRS from FY2026, under which segment and consolidated profit measures change to “income before tax excluding finance costs”; as a result, a direct comparison with FY2025 Japan GAAP figures is not possible. On this new basis, FY2026 forecasts call for income before tax excluding finance costs (excluding inventory impact) of JPY140.0bn and net income (excluding inventory impact) of JPY90.0bn, both reflecting an expected negative time-lag as crude oil prices are forecast to decline through the year. FY2026 investment expenditure is forecast at JPY265.0bn (2026-2030 Mid-term Plan total JPY1,800.0bn: GRIT JPY127.0bn/JPY830.0bn, GROWTH・CNX JPY123.0bn/JPY810.0bn, Business platform JPY15.0bn/JPY160.0bn), following FY2025 actual investment of JPY214.7bn, which came in JPY108.2bn below the November forecast of JPY333.0bn mainly due to delayed payment timing for certain major projects.

Item	FY2025 Actual	FY2026 Forecast
Operating Income + Equity Income (Japan GAAP, ¥bn)	214.7	－
Excl. Inventory Impact (¥bn)	244.1	－
Income Before Tax, Excl. Finance Costs (IFRS, ¥bn)	－	120.0
Excl. Inventory Impact (¥bn)	－	140.0
Net Income Attributable to Owners of the Parent (¥bn)	171.9	75.0
Excl. Inventory Impact (¥bn)	192.3	90.0

Segment	FY2025 Operating + Equity Income (¥bn)	FY2026 Profit/Loss Before Tax Excl. Finance Costs (¥bn)
Petroleum	207.1	105.0
Basic Chemicals	(6.8)	(30.0)
Functional Materials	33.4	32.0
Power and Renewables	(1.8)	4.0
Resources	33.1	45.0
Oil E&P	14.0	16.0
Coal	19.1	29.0
Others	(20.9)	(16.0)
Total	244.1	140.0

Shareholder Returns

For FY2025, Idemitsu paid a full-year dividend of JPY36 per share (JPY18 interim, JPY18 year-end) and decided a JPY25.0bn share buyback on May 12. For FY2026, the company forecasts an unchanged dividend of JPY36 per share (JPY18 interim, JPY18 year-end) and will introduce a progressive dividend policy from FY2026, targeting a total shareholder return ratio of over 50% during FY2026-FY2030.

Medium-Term Plan / Topics

Idemitsu announced its new Medium-Term Management Plan on May 12, 2026. Key topics include a decision to invest USD500 million in MidOcean Energy, an LNG company established and managed by EIG, to pursue full-scale entry into the LNG business through a strategic partnership, and receipt of Japan Fair Trade Commission clearance (together with Mitsui Chemicals and Sumitomo Chemical) for the integration of Sumitomo Chemical’s polypropylene (PP) and linear low-density polyethylene (LLDPE) businesses into Prime Polymer, with implementation scheduled after completion of overseas merger reviews. Regarding Nghi Son Refinery in Vietnam, the company continued high utilization rates and profitability at the operating level in FY2025 but anticipates a net loss due to a significant interest burden; sponsor discussions on interest reduction measures such as shifting to simple interest are underway, targeting a decision within FY2026, and NSRP aims to achieve net profit around 2030. FY2026 forecast ROE is 6.1%, with the medium-term plan citing an ROE of around 12% in FY2027 as a possible target.

This article is an analysis based on publicly available information and is not a recommendation to buy or sell any specific securities. Investment decisions are your own responsibility.