INPEX Q1 Operating Profit Falls 14% to ¥278 Billion on Softer Energy Prices; Lifts Dividend to ¥108

INPEX Corporation (TSE: 1605) reported consolidated first-quarter results for the three months ended March 31, 2026 (Q1 of the fiscal year ending December 2026, FY12/2026) under IFRS. Revenue fell 6.5% year-on-year to ¥501,803 million from ¥536,899 million, while operating profit declined 14.1% to ¥278,215 million from ¥323,873 million. Pre-tax profit eased 13.1% to ¥291,352 million, profit for the period fell 11.7% to ¥118,968 million, and profit attributable to owners of the parent dropped 13.4% to ¥109,414 million from ¥126,293 million. Basic EPS came in at ¥94.08 versus ¥105.46 a year earlier.

Softer realized prices drove the top-line decline

INPEX is Japan's largest oil and natural-gas exploration and production (E&P) company, operator of the Ichthys LNG project in Australia and a global upstream portfolio. The first-quarter softness reflected lower realized oil and gas prices against a particularly strong year-earlier quarter, which pulled both revenue and operating profit lower despite the company's broad producing-asset base. With the bulk of INPEX's earnings tied to crude and LNG benchmarks, the quarter underscores how sensitive the group's reported numbers remain to short-term swings in global energy prices.

Comprehensive income swings sharply positive on FX

While the income statement softened, quarterly comprehensive income swung to a positive ¥231,599 million from a ¥140,434 million loss a year earlier — a sharp turnaround driven mainly by foreign-exchange translation gains on the company's substantial overseas assets. For a producer with large dollar-denominated upstream operations, currency movements can dominate the comprehensive-income line independently of the underlying operating result, and that dynamic was clearly visible this quarter.

Balance sheet remains robustly capitalized

INPEX closed the quarter with total assets of ¥8,019,409 million and total equity of ¥5,122,733 million. Equity attributable to owners of the parent stood at ¥4,889,940 million, leaving the owners'-equity ratio at a healthy 61.0%. That capitalization gives the group ample balance-sheet capacity to fund its upstream investment program and its expansion into hydrogen, ammonia and renewables, while sustaining shareholder returns through a softer price environment.

Annual dividend lifted to ¥108

The company raised its planned FY12/2026 annual dividend to ¥108.00 per share (¥54.00 interim + ¥54.00 year-end), up from ¥100.00 (¥50.00 + ¥50.00) in FY12/2025 — an increase of 8.0%. The higher payout signals management's confidence in cash generation across the cycle and continues INPEX's progressive shareholder-return trajectory even as quarterly profit declined on lower prices.

Full-year guidance issued as a wide range

Reflecting the uncertainty in commodity prices, INPEX presented its revised FY12/2026 full-year guidance as a range rather than a point estimate. Revenue is guided to ¥2,004,000 million–¥2,291,000 million (-0.4% to +13.9%), operating profit to ¥1,086,000 million–¥1,368,000 million (-4.4% to +20.5%), pre-tax profit to ¥1,134,000 million–¥1,416,000 million, and profit attributable to owners to ¥350,000 million–¥450,000 million (-11.1% to +14.3%), implying basic EPS of ¥300.95–¥386.94. The wide band underscores how heavily the full-year outcome will hinge on the path of oil, gas and LNG prices over the remaining three quarters.

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.