Summary of Operating Results, etc.
1.Summary of Consolidated Operating Results
Regarding the Group’s consolidated financial results for the six months ended June 30, 2026, revenue decreased by ¥48.3 billion, or 4.6%, to ¥1,000.4 billion from the corresponding period of the previous fiscal year due to a decrease in sales volume of crude oil. Revenue of crude oil decreased by ¥85.1 billion, or 10.9%, to ¥694.9 billion, and revenue of natural gas increased by ¥20.5 billion, or 8.2%, to ¥271.9 billion. Sales volume of crude oil decreased by 16,331 thousand barrels, or 22.8%, to 55,170 thousand barrels, and sales volume of natural gas increased by 2,953 million cf, or 1.2%, to 256,808 million cf. Sales volume of overseas natural gas decreased by 1,292 million cf, or 0.6%, to 208,903 million cf, and sales volume of domestic natural gas increased by 114 million m3, or 9.7%, to 1,284 million m3 (47,905 million cf). The average sales price of overseas crude oil increased by US$6.00, or 8.2%, to US$79.51 per barrel. The average sales price of overseas natural gas increased by US$0.21, or 4.2%, to US$5.24 per thousand cf, and the average sales price of domestic natural gas decreased by ¥4.08, or 5.0%, to ¥77.00 per m3. The average exchange rate of the Japanese yen against the U.S. dollar on consolidated revenue depreciated by ¥10.00, or 6.7%, to ¥158.37 per U.S. dollar.
The decrease of ¥48.3 billion in revenue was mainly derived from the following factors: regarding revenue of crude oil and natural gas, a decrease in sales volume pushing sales down of ¥169.5 billion to the decrease, an increase in unit sales price contributing ¥49.2 billion to the increase, the depreciation in the average exchange rate of the Japanese yen against the U.S. dollar contributing ¥55.6 billion to the increase, and an increase in revenue excluding crude oil and natural gas of ¥16.2 billion.
Meanwhile, cost of sales decreased by ¥3.9 billion, or 0.9%, to ¥427.5 billion. Exploration expenses decreased by ¥0.9 billion, or 14.9%, to ¥5.1 billion. Selling, general and administrative expenses increased by ¥4.8 billion, or 8.3%, to ¥62.5 billion. Other operating income increased by ¥40.4 billion, or 788.0%, to ¥45.6 billion. Other operating expenses increased by ¥0.1 billion, or 2.8%, to ¥7.0 billion. Share of profit of investments accounted for using equity method increased by ¥9.8 billion, or 15.1%, to ¥74.9 billion. As a result, operating profit increased by ¥1.8 billion, or 0.3%, to ¥618.7 billion.
Finance income decreased by ¥9.8 billion, or 14.0%, to ¥60.2 billion. Finance costs decreased by ¥7.3 billion, or 17.5%, to ¥34.6 billion. As a result, profit before tax decreased by ¥0.6 billion, or 0.1%, to ¥644.3 billion.
Income tax expense decreased by ¥42.8 billion, or 10.7%, to ¥359.7 billion. Profit attributable to non-controlling interests increased by ¥2.6 billion, or 14.0%, to ¥21.4 billion. As a result of the above effects, profit attributable to owners of parent increased by ¥39.6 billion, or 17.7%, to ¥263.1 billion.
Operating results by segment are as follows:
- 1.Oil & Gas Japan
- Although revenue increased by ¥6.7 billion, or 6.4%, to ¥112.6 billion due to an increase in sales volume of natural gas, profit attributable to owners of parent decreased by ¥9.4 billion, or 54.4%, to ¥7.8 billion mainly due to an increase in cost of sales.
- 2.Oil & Gas Overseas - Ichthys Project
- Revenue increased by ¥32.1 billion, or 17.5%, to ¥215.8 billion due to an increase in sales price of crude oil. Profit attributable to owners of parent increased by ¥34.0 billion, or 24.5%, to ¥173.0 billion.
- 3.Oil & Gas Overseas - Other Projects
- Although revenue decreased by ¥90.0 billion, or 12.0%, to ¥659.2 billion due to a decrease in sales volume of crude oil, profit attributable to owners of parent increased by ¥5.6 billion, or 7.8%, to ¥77.8 billion due to factors including a decrease in income tax expense.
2.Summary of Consolidated Financial Position
Total assets as of June 30, 2026 increased by ¥651.7 billion to ¥8,386.9 billion, compared to December 31, 2025. Current assets increased by ¥330.3 billion to ¥1,439.4 billion due to an increase in other financial assets, and others. Non-current assets increased by ¥321.3 billion to ¥6,947.4 billion due to an increase in oil and gas assets, and others.
Meanwhile, total liabilities increased by ¥323.6 billion to ¥3,035.9 billion. Current liabilities increased by ¥251.1 billion to ¥1,090.8 billion and non-current liabilities increased by ¥72.4 billion to ¥1,945.1 billion.
Total equity increased by ¥328.0 billion to ¥5,350.9 billion. Equity attributable to owners of parent increased by ¥355.4 billion to ¥5,102.5 billion. Non-controlling interests decreased by ¥27.3 billion to ¥248.3 billion.
3.Summary of Cash Flows
The Group’s cash and cash equivalents amounted to ¥216.1 billion as of June 30, 2026, reflecting a net increase of ¥38.1 billion from ¥168.4 billion as of December 31, 2025, and the effect of exchange rate changes of ¥9.6 billion.
Cash flows from operating, investing, and financing activities and their factors during the six months ended June 30, 2026 are as follows:
- 1.Cash flows from operating activities
- Net cash provided by operating activities amounted to ¥553.8 billion, up ¥125.9 billion from the corresponding period of the previous fiscal year, mainly due to a decrease in income taxes paid despite an increase in foreign exchange gain, which is a non-cash item.
- 2.Cash flows from investing activities
- Net cash used in investing activities amounted to ¥424.7 billion, up ¥60.4 billion from the corresponding period of the previous fiscal year, mainly due to an increase in payments for acquisition of development and production assets.
- 3.Cash flows from financing activities
- Net cash used in financing activities amounted to ¥91.0 billion, up ¥50.8 billion from the corresponding period of the previous fiscal year, mainly due to a net decrease in commercial paper despite a decrease in cash dividends paid to non-controlling interests.
4.Explanation Regarding Future Forecast Information Such as Forecasts for Consolidated Financial Results
The Company has revised its consolidated financial forecasts for the fiscal year ending December 31, 2026, mainly reflecting the stable production of the Ichthys Project and revisions to its assumptions for crude oil prices and foreign exchange rates from the third quarter onward, while uncertainties surrounding the situation in the Middle East remain.
| Revenue | Operating profit | Profit before tax | Profit attributable to owners of parent | |
|---|---|---|---|---|
| Previous Forecasts: A | 2,004,000 – 2,291,000 | 1,086,000 – 1,368,000 | 1,134,000 – 1,416,000 | 350,000 – 450,000 |
| Revised Forecasts: B | 1,973,000 | 1,223,000 | 1,278,000 | 510,000 |
| Increase (Decrease): B-A | (31,000) – (318,000) | 137,000 – (145,000) | 144,000 – (138,000) | 160,000 – 60,000 |
| Percentage change (%) | (1.5) – (13.9) | 12.6 – (10.6) | 12.7 – (9.7) | 45.7 – 13.3 |
(Millions of yen)
The above forecasts are calculated based on the following assumptions:
| Previous Forecasts | Revised Forecasts | |
|---|---|---|
| Crude oil price (Brent) |
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| Exchange rate |
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Crude oil prices at which the Company sells products vary depending on crude oil type and differ from Brent crude oil prices.
Crude oil price differences are determined by the quality of each crude oil type, etc., and are also affected by market conditions.
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