Idemitsu Kosan Co., Ltd. (TSE: 5019), Japan's second-largest refining-and-petrochemicals integrated player and a Tokyo Otemachi-based energy major, reported FY3/2026 consolidated J-GAAP results showing a textbook downcycle-to-upcycle profit recovery. Revenue fell 11.8% to ¥8,105.9 billion on lower crude oil prices that flowed through to product pricing, but operating profit climbed 30.8% to ¥212.2 billion, ordinary profit rose 6.9% to ¥229.6 billion, and profit attributable to owners of the parent jumped 65.2% to ¥171.9 billion. Basic EPS reached ¥140.38 (vs ¥77.83), ROE climbed to 9.4% from 5.9%, and comprehensive income surged 124.2% to ¥242.9 billion.
Margin recovery and one-off cleanup drive earnings
The headline operating-profit growth reflects three reinforcing tailwinds: a rebound in domestic refining margins after the prior year's narrowed crack spreads, a normalization of inventory effects (the prior year carried a meaningful negative inventory valuation impact when crude fell sharply), and the non-recurrence of one-off impairment and restructuring charges that compressed FY3/2025 earnings. The 65% jump at the net line magnifies the operating gain through both the lower base effect and reduced tax burden. The standalone (non-consolidated) parent-company picture confirms the same pattern: operating profit of ¥95.1 billion (+193%) and net profit of ¥143.4 billion (+395%) on revenue of ¥5,812.7 billion (-11.7%).
Fuji Oil consolidation reshapes the refining footprint
The fiscal year saw a structurally important change to the group's scope: Idemitsu newly consolidated Fuji Oil Co., Ltd., the Sodegaura, Chiba-based refiner historically operated as an industry joint venture. The move brings Fuji Oil's ~143,000 b/d Sodegaura refinery under Idemitsu's reporting boundary and gives the group greater control over Kanto-region supply, inventory, and turnaround planning. Combined with Idemitsu's existing Chiba complex, the consolidation tightens the company's hand in the Tokyo Bay refining cluster — one of the most strategically important fuel-supply nodes for the Japanese capital region.
Cash flow strong, balance sheet expands; share count cut
Cash flow from operating activities was ¥392.4 billion (down from ¥476.7 billion as working capital absorbed some inflows), investing outflows widened to ¥291.6 billion on the Fuji Oil consolidation and ongoing refining/EV-battery investments, and financing outflows totaled ¥104.9 billion, leaving cash and equivalents at ¥157.1 billion at year-end. Total assets rose to ¥5,328.8 billion from ¥4,775.6 billion, and net assets climbed to ¥1,951.1 billion with the equity ratio steady at 36.0%. Notably, Idemitsu's treasury stock balance increased markedly to 70.5 million shares (vs 133.4 million held outstanding-and-issued in the table; total outstanding-including-treasury fell to 1,288.7 million shares from 1,358.1 million), reflecting an active share-buyback execution program.
Dividend held at ¥36; IFRS adoption from FY27
The annual dividend was ¥36 per share (¥18 interim + ¥18 year-end), unchanged year-on-year, with the FY3/2027 forecast also held at ¥36. The payout ratio compressed to 25.6% from 46.3% as earnings recovered against a stable per-share distribution. Idemitsu announced that it will voluntarily adopt IFRS effective from Q1 FY3/2027, joining the now-substantial roster of Japanese majors that have switched away from J-GAAP. As a result, the FY27 consolidated guidance is presented on an IFRS basis without YoY comparison: profit before tax excluding financial costs and inventory-valuation effects of ¥140.0 billion, profit attributable to owners of the parent excluding inventory effects of ¥90.0 billion, profit attributable to owners of the parent of ¥75.0 billion, and basic EPS of ¥62.00.
| Metric | FY3/2026 | FY3/2025 | YoY |
|---|---|---|---|
| Revenue (¥ billion) | 8,105.9 | 9,190.2 | −11.8% |
| Operating profit (¥ billion) | 212.2 | 162.2 | +30.8% |
| Ordinary profit (¥ billion) | 229.6 | 214.8 | +6.9% |
| Profit attrib. to owners (¥ billion) | 171.9 | 104.1 | +65.2% |
| Basic EPS (¥) | 140.38 | 77.83 | +80.4% |
| ROE | 9.4% | 5.9% | +3.5pp |
| Equity ratio | 36.0% | 36.0% | flat |
| Annual dividend (¥) | 36.00 | 36.00 | flat |
JapanStockPulse provides informational content only and does not constitute investment advice. Figures are taken from the company's published earnings short report and may be subject to subsequent revision.