| 指標 | 当期 | 前年同期 | YoY |
|---|---|---|---|
| Revenue / Net Sales | ¥3403.4B | ¥3890.8B | -12.5% |
| Operating Income / Operating Profit | ¥389.1B | ¥620.1B | -37.2% |
| Ordinary Income | ¥615.6B | ¥642.2B | -4.1% |
| Net Income / Net Profit | ¥379.2B | ¥738.6B | -48.7% |
| ROE | 5.8% | 13.3% | - |
For the fiscal year ended March 2026, results came in at Revenue ¥3403.4B (YoY -¥487.4B -12.5%), Operating Income ¥389.1B (YoY -¥231.0B -37.2%), Ordinary Income ¥615.6B (YoY -¥26.6B -4.1%), and Net Income attributable to owners of the parent ¥379.2B (YoY -¥359.4B -48.7%), reflecting lower revenue and profit. Declines in crude oil and natural gas prices and margin compression in the Domestic Infrastructure & Utility Business pressured operating performance, driving gross margin down to 22.5% (prior year 25.5%), a 3.0pt decline, and Operating Margin to 11.4% (prior year 15.9%), a 4.5pt deterioration. At the ordinary income level, non-operating income of ¥278.9B—driven by foreign exchange gains ¥82.0B and dividend income ¥28.7B—provided support, limiting the decline in Ordinary Income to -4.1%. At the Net Income level, a gain on sale of investment securities ¥457.0B was recorded as an extraordinary gain, but pre-tax income of ¥635.6B was subject to income taxes of ¥78.9B (effective tax rate 12.4%), while an impairment loss of ¥21.9B was recorded in the Europe segment, widening the final profit decline. Operating Cash Flow was ¥1029.8B (YoY -21.3%), 2.7x Net Income, indicating maintained cash-generating ability; however, Investing Cash Flow was a large outflow of -¥2004.9B, mainly due to acquisition of subsidiary shares -¥1577.1B, resulting in Free Cash Flow deteriorating to -¥975.2B.
【Revenue】Revenue was ¥3403.4B (YoY -12.5%), with all segments experiencing declines. By region, Japan ¥2481.9B (-11.3%) accounted for 72.9% of the total, driven by declines in domestic natural gas sales ¥733.5B, power ¥484.6B, and crude oil ¥1049.7B. North America was ¥523.8B (-6.0%), Europe ¥80.7B (-57.9%, sharply down from ¥191.8B prior year), and the Middle East ¥316.9B (-7.6%). By product, E&P crude oil sales were ¥1049.7B (prior ¥1244.2B) and overseas natural gas ¥42.9B (prior ¥46.0B), reflecting softer commodity prices. In Infrastructure & Utility, LNG was ¥231.1B (prior ¥439.9B), roughly halved; power ¥484.6B (prior ¥513.9B) slightly declined; biomass fuel doubled to ¥216.3B (prior ¥101.7B). Petroleum products & trading sales fell to ¥454.4B (prior ¥595.9B). Other businesses saw contract sales rise to ¥108.1B (prior ¥85.7B). Intersegment eliminations had minimal impact at ¥0B this period vs. ¥21M prior year.
【Profitability】Cost of sales was ¥2635.9B (cost ratio 77.5%, prior 74.5%), resulting in Gross Profit ¥767.4B (Gross Margin 22.5%, prior 25.5%), down 3.0pt. SG&A was ¥358.6B (SG&A ratio 10.5%, prior 8.7%), rising despite lower revenue and worsening operating leverage, leading to Operating Income ¥389.1B (Operating Margin 11.4%, prior 15.9%), shrinking 4.5pt. Non-operating income totaled ¥278.9B, comprising dividend income ¥28.7B, interest income ¥22.8B, foreign exchange gains ¥82.0B, equity-method investment income ¥41.1B, etc. Non-operating expenses were ¥52.5B (interest expense ¥5.6B, foreign exchange losses ¥18.1B, etc.), resulting in Ordinary Income ¥615.6B (YoY -4.1%). Extraordinary items were net +¥20.0B (extraordinary gains ¥50.7B including gain on sale of investment securities ¥457.0B; extraordinary losses ¥30.6B including impairment loss ¥21.9B). Pre-tax income ¥635.6B was subject to income taxes of ¥78.9B (effective tax rate 12.4%), and after deducting non-controlling interests ¥22.4B, Net Income attributable to owners of the parent was ¥379.2B (YoY -48.7%). Comprehensive income was ¥1147.9B, influenced by Other securities valuation difference ¥577.1B, foreign currency translation adjustments -¥103.6B, and deferred hedge gains/losses ¥61.6B. In conclusion, declines in commodity prices and domestic margin compression shifted results from revenue growth with lower profit to revenue decline and profit decline; however, non-operating income and reduced tax burden partially mitigated the declines at the ordinary and net income levels.
The Japan segment reported Revenue ¥2481.9B (YoY -11.3%) and Operating Income ¥308.7B (YoY -31.4%), with an Operating Margin of 12.4%. Margin compression in domestic natural gas and power and reduced crude sales drove the profit decline. The North America segment posted Revenue ¥523.8B (YoY -6.0%) and Operating Income ¥170.8B (YoY -19.0%), maintaining a high margin of 32.6%; despite lower oil & gas prices, asset efficiency remained strong. The Europe segment recorded Revenue ¥80.7B (YoY -57.9%) and Operating Income ¥16.3B (YoY -70.9%), Operating Margin 20.1%; significant revenue decline and an impairment loss of ¥21.9B led to a steep profit drop. The Middle East segment had Revenue ¥316.9B (YoY -7.6%) and Operating Income ¥29.7B (YoY -28.6%), Operating Margin 9.4%, affected by reductions across oil development, production, and sales. Total segment profit summed to ¥525.5B, from which corporate expenses -¥141.3B and other adjustments -¥136.3B were deducted, resulting in consolidated Operating Income ¥389.1B. By margin, North America was highest at 32.6%, followed by Europe 20.1%, Japan 12.4%, and Middle East 9.4%; concentration of profit in Japan (79.3% of operating profit) indicates high sensitivity to domestic market fluctuations.
【Profitability】Operating Margin was 11.4% (prior 15.9%), down 4.5pt; Net Profit Margin was 11.1% (prior 19.0%), down 7.9pt. ROE declined substantially to 5.8% (prior 15.7%), indicating deterioration in capital efficiency. EBITDA was ¥859.7B (Operating Income ¥389.1B + Depreciation & Amortization ¥470.5B), yielding an EBITDA Margin of 25.3%, indicating maintained cash-generating capacity. 【Cash Quality】Operating Cash Flow (OCF) ¥1029.8B is 2.7x Net Income ¥379.2B, and the OCF/EBITDA ratio is 1.20x, indicating high cash conversion efficiency. Accrual ratio was -5.8% (= (Net Income ¥379.2B - OCF ¥1029.8B) / Total Assets ¥8624.7B), showing good cash backing for profits. 【Investment Efficiency】Total Asset Turnover was 0.395x (Revenue ¥3403.4B / Total Assets ¥8624.7B), down from 0.571x prior year, as M&A-driven asset increases diluted pre-operational efficiency. CapEx / Depreciation was 0.61x (Capital Expenditure ¥286.3B / Depreciation ¥470.5B), below maintenance level, suggesting medium- to long-term asset deterioration risk. 【Financial Soundness】Equity Ratio was 76.4% (prior 77.4%), remaining high; D/E ratio was 0.31x (estimated interest-bearing debt / Net Assets ¥6589.0B), indicating conservative leverage. Current Ratio was 174.0% (Current Assets ¥1553.6B / Current Liabilities ¥892.9B), showing adequate short-term liquidity. Cash and deposits ¥542.6B represent 15.9% of Revenue, narrowing liquidity but with short-term securities ¥30.0B bringing the liquidity buffer to ¥572.6B.
OCF was ¥1029.8B (prior ¥1307.7B, -21.3%). Starting from pre-tax income ¥635.6B, adjustments including Depreciation & Amortization ¥470.5B, impairment loss ¥21.9B, and equity-method investment loss -¥41.1B produced subtotal OCF ¥1197.7B. Working capital changes—inventory increase -¥9.9B, trade receivables decrease ¥61.7B, trade payables increase ¥82.5B—contributed positively, and income taxes paid -¥171.8B were deducted to arrive at OCF. Investing Cash Flow was -¥2004.9B (prior -¥1070.8B), driven mainly by acquisition of subsidiary shares -¥1577.1B, CapEx -¥286.3B, intangible asset acquisitions -¥6.1B, acquisition of investment securities -¥84.6B, and loan advances -¥68.6B; inflows included time deposit maturities ¥108.9B, proceeds from sale of subsidiary shares due to deconsolidation ¥169.2B, and proceeds from sale of securities ¥2.9B. Free Cash Flow plunged to -¥975.2B (OCF ¥1029.8B + Investing CF -¥2004.9B), a significant deterioration from prior year +¥236.9B. Financing Cash Flow was +¥60.1B (prior -¥386.7B), with short-term borrowings increase ¥301.5B and net commercial paper issuance ¥199.8B as funding sources, offset by dividend payments -¥128.4B, dividends to non-controlling interests -¥3.3B, long-term borrowings repayments -¥2.5B, and share buybacks ¥0B. Cash and equivalents decreased by -¥909.8B from beginning balance ¥1183.6B to year-end ¥542.6B; this was driven by one-off outflows for large M&A and is not assessed as a permanent impairment of cash-generating capability—asset ramp-up and recovery in OCF in subsequent periods will be key.
Of Ordinary Income ¥615.6B, Operating Income ¥389.1B forms the core recurring earnings, with Non-operating Income ¥278.9B (foreign exchange gains ¥82.0B, dividend income ¥28.7B, interest income ¥22.8B, equity-method income ¥41.1B, etc.) adding on; however, foreign exchange gains are largely one-off and have limited persistence. Extraordinary items were net +¥20.0B (extraordinary gains ¥50.7B, extraordinary losses ¥30.6B); the gain on sale of investment securities ¥457.0B is a temporary gain, and the impairment loss ¥21.9B is also temporary, largely offsetting each other and leaving limited net impact on pre-tax income ¥635.6B. Non-operating income ratio is equivalent to 8.2% of Revenue (¥278.9B / ¥3403.4B), complementing Operating Income, but FX and equity-method results are sensitive to market conditions; recovery of operating-level margins is important for the quality of recurring earnings. Accrual quality is sound: OCF/NI ratio 2.7x and OCF/EBITDA 1.20x indicate high cash conversion and small divergence between reported profits and cash receipts. Comprehensive income ¥1147.9B exceeded Net Income ¥379.2B by ¥768.7B, mainly due to Other securities valuation difference ¥577.1B, which carries future realization and valuation volatility risk but does not currently impair the appropriateness of revenue recognition.
Against the full-year company forecast (Revenue ¥3030.0B, Operating Income ¥410.0B, Ordinary Income ¥450.0B, Net Income attributable to owners of the parent ¥600.0B, EPS ¥234.38), actuals were Revenue ¥3403.4B (progress 112.3%), Operating Income ¥389.1B (progress 94.9%), Ordinary Income ¥615.6B (progress 136.8%), and Net Income attributable to owners of the parent ¥379.2B (progress 63.2%). Revenue exceeded the forecast by 12.3%, but Operating Income missed by 5.1% due to domestic Infrastructure & Utility margin compression and higher SG&A. Ordinary Income outperformed by 36.8% due to better-than-expected non-operating income, but Net Income underperformed by 36.8% because of variations in extraordinary items, taxes, and non-controlling interests, resulting in significant deviation from guidance. Dividend forecast was annual ¥22.5 per share vs. actual annual dividend ¥65 (pre-stock-split basis), yielding a payout ratio of 17.5% on actuals, substantially above the forecast payout ratio 9.6% (based on EPS ¥234.38). Next-year guidance is undisclosed; outlook depends on commodity price trends, ramp-up contribution from North American assets, and recovery of domestic margins.
Annual dividend was ¥65 per share (interim ¥20, year-end ¥45). Based on Net Income attributable to owners of the parent ¥379.2B and weighted average shares outstanding 256M shares, EPS was ¥208.74, giving a payout ratio of 31.1% (note: a 5-for-1 stock split was implemented on October 1, 2024; pre-split annual dividend was ¥275). Prior year dividend was ¥125 (pre-split; post-split equivalent ¥25), so on a split-adjusted basis the annual ¥65 indicates a dividend-increase trend, despite EPS declining YoY -33.7%. Total dividends of approximately ¥14.11B (¥65 × 256M shares) represent 13.7% of OCF ¥1029.8B, indicating capacity to sustain dividends. However, Free Cash Flow was -¥975.2B, so dividend coverage by FCF is negative; this period’s dividends were funded from existing cash balances (beginning balance ¥1183.6B) and financing (short-term borrowings increase and CP issuance). No share buybacks were executed this period (¥0), so Total Return Ratio equals the payout ratio 31.1%. The dividend policy appears to target stable dividends linked to profit, but prioritization of capital allocation (growth investment vs. shareholder returns) amid ongoing large M&A is a medium-term issue.
Commodity Price Volatility Risk: E&P revenue is directly tied to crude oil and natural gas prices; crude oil sales decreased YoY by ¥194.5B this period. In declining Brent or HH gas price environments, Operating Margin can be severely compressed (this period 11.4% vs. prior 15.9%), causing high earnings volatility. Equity-method investment income (¥41.1B in North American assets) can reverse depending on commodity prices, indicating high sensitivity to external market conditions.
Domestic Concentration Risk: The Japan segment accounts for 72.9% of revenue and 79.3% of operating income, so margin fluctuations in domestic natural gas and power directly affect consolidated results. This period domestic gas sales ¥733.5B and power ¥484.6B both underperformed, and segment Operating Income fell to ¥308.7B (prior ¥449.8B), down 31.4%. Fuel prices, regulatory environment, and demand shifts have significant impact, and insufficient regional diversification is a structural risk.
Asset Retirement Obligations (ARO) and Impairment Risk: ARO balance ¥401.4B (19.7% of liabilities) represents future decommissioning cost obligations, and changes in discount rates or estimates could require additional recognition. An impairment loss ¥21.9B was recorded in the Europe segment, indicating ongoing asset valuation reviews. North American PPE rose to ¥3009.4B (prior ¥1298.8B), a 131.7% increase, but ramp-up delays or market deterioration introduce impairment risk; asset efficiency and impairment management are medium-term focal points.
Profitability & Return
| 指標 | 自社 | 中央値 (IQR) | Delta |
|---|---|---|---|
| Operating Margin | 11.4% | 6.1% (2.6%–11.6%) | +5.3pt |
| Net Profit Margin | 11.1% | 3.9% (2.2%–9.8%) | +7.2pt |
Profitability substantially exceeds the industry median, with both operating and net margins at upper levels.
Growth & Capital Efficiency
| 指標 | 自社 | 中央値 (IQR) | Delta |
|---|---|---|---|
| Revenue Growth Rate (YoY) | -12.5% | 3.3% (-0.3%–6.3%) | -15.8pt |
Revenue growth rate trails the industry median by 15.8pt, with revenue declines notable due to commodity price decreases and domestic margin compression.
※ Source: Company compilation based on public financial statements
Operating-level profit decline was primarily due to commodity price weakness and domestic margin compression; nevertheless, OCF ¥1029.8B is 2.7x Net Income, and OCF/EBITDA 1.20x indicates strong cash backing of profits. Non-operating income ¥278.9B (FX gains, dividend income) supported Ordinary Income, but these items are of limited persistence—operating profit recovery will be critical next period.
Major M&A increased North America segment assets to ¥3009.4B (YoY +131.7%), reducing Total Asset Turnover to 0.395x (prior 0.571x); in the medium term, ramp-up of North American E&P assets could drive volume and margin improvements. Conversely, CapEx/Depreciation 0.61x suggests underinvestment for maintenance, and balancing external growth via M&A and internal investment will be a theme for improving asset efficiency.
Financial position remains solid with Equity Ratio 76.4%, D/E 0.31x, and Current Ratio 174.0%, indicating significant capital allocation flexibility. While payout ratio 31.1% is within a healthy range, Free Cash Flow -¥975.2B implies that continued large-scale M&A will rely on existing cash and borrowings, raising questions on prioritization between growth investments and shareholder returns. ARO balance ¥401.4B and investment securities ¥2740.2B imply potential future cash needs and valuation volatility; active ARO management and opportunistic sales of investment securities will influence cash allocation flexibility.
This report was automatically generated by AI analyzing XBRL financial statement data. It does not constitute a recommendation to invest in any particular security. Industry benchmarks are reference information compiled by the Company based on publicly available financial statements. Investment decisions are your own responsibility; consult a professional advisor as needed.