ENEOS (5020) Q4 2026 earnings summary

Executive summary

• FY2025 operating profit surged by JPY 94.9 billion year-on-year, mainly from improved inventory valuation and higher oil prices amid Middle East tensions, with further gains forecast for FY2026 from asset sales and higher oil/gas prices.

• Major M&A: acquisition of Chevron's refining and sales businesses in Southeast Asia and Australia for $2.17 billion, expected to close in 2027, supporting overseas revenue growth and portfolio restructuring.

• Group restructuring aims to reduce consolidated subsidiaries by about 100, strengthen governance, and enhance ROIC.

• Share buybacks of JPY 50 billion and additional sale of JX Advanced Metals shares to improve capital efficiency.

• Addressed criminal complaint and indictment for suspected Antimonopoly Act violations at a group company, emphasizing strengthened governance and compliance.

Financial highlights

• FY2025 revenue: JPY 11,765.5 billion (-10% YoY); operating profit: JPY 466.6 billion (+26% YoY); profit attributable to owners: JPY 258.7 billion (+14% YoY).

• Excluding inventory valuation, FY2025 operating profit: JPY 474.4 billion (+11% YoY).

• FY2026 revenue forecast: JPY 12,850.0 billion (+9% YoY); operating profit: JPY 610.0 billion (+31% YoY); profit attributable to owners: JPY 415.0 billion (+60% YoY).

• Free cash flow for FY2025 was JPY 251.1 billion; FY2026 projected at JPY 281.0 billion.

• Equity in earnings of affiliates rose sharply to JPY 81.0 billion from JPY 9.6 billion.

Outlook and guidance

• FY2026 assumes limited Middle East impact until May 2026, with Dubai crude price at $80–$85 from June onward and exchange rate at JPY 151–155/$.

• Sensitivity: every $5/bbl oil price increase adds JPY 71.0 billion to operating profit; every JPY 5/$ weaker yen adds JPY 35.0 billion.

• Additional shareholder returns of about JPY 100 billion may be considered to maintain a total payout ratio of over 50% on a three-year average.

• Overseas business revenue targeted to reach 50% of total by FY2030, up from under 20%.