Idemitsu Kosan’s Earnings Reflect Mixed Performance

Idemitsu Kosan Co ( (IDKOF) ) has released its Q3 earnings. Here is a breakdown of the information Idemitsu Kosan Co presented to its investors.

Idemitsu Kosan Co., Ltd. is a prominent Japanese company operating primarily in the petroleum sector, known for its diverse portfolio in energy and chemical products. In its latest earnings report, the company announced a 7.4% increase in net sales for the nine months ending December 31, 2024, totaling ¥6,876.5 billion. However, the operating income plummeted by 58% year on year to ¥123.3 billion, and net income attributable to owners of the parent dropped by 46.7% to ¥127.5 billion.

Key financial metrics indicate a challenging period for Idemitsu, with declines across major income categories despite an increase in sales. The petroleum segment saw a 12% rise in net sales due to yen depreciation, yet inventory valuation effects, influenced by falling crude oil prices, led to a 53.8% decline in segment income. Meanwhile, the basic chemicals segment reported a decline in both sales and income due to production issues and lower margins.

The company faced hurdles in the functional materials and power segments as well, with reduced production volumes and increased costs impacting profitability. On the brighter side, the resources segment showed resilience with a slight increase in income due to favorable currency effects, although overall sales in this segment dropped significantly by 37%.

Looking ahead, Idemitsu Kosan’s management remains cautiously optimistic, revising their full-year forecasts based on current performance and market conditions. They anticipate a moderate 5.5% growth in net sales for the fiscal year ending March 2025, while expecting continued challenges in maintaining income levels due to external factors impacting the market.