Quarterly trends and results

Cumulative		FY03/23				FY03/24				FY03/24
(JPYmn)		Q1	Q1-Q2	Q1-Q3	Q1-Q4	Q1	Q1-Q2	Q1-Q3	Q1-Q4	(% of forecast)	FY Est.
Sales revenue		245,353	499,522	762,988	1,012,018	214,743	455,635			38.0%	1,200,000
	YoY	18.5%	25.5%	16.1%	8.1%	-12.5%	-8.8%				18.6%
Sales		-	-	-	-	-	-
	YoY	-	-	-	-	-	-
Gross profit		22,374	43,984	67,085	89,556	21,132	42,938
	YoY	7.4%	5.6%	6.2%	7.1%	-5.6%	-2.4%
	Gross profit / sales revenue	9.1%	8.8%	8.8%	8.8%	9.8%	9.4%
	Gross profit margin	-			-	-	-
SG&A expenses		16,710	33,154	50,209	68,889	17,146	27,053
	YoY	0.4%	1.0%	0.8%	1.2%	2.6%	-18.4%
	SG&A expenses / sales revenue	6.8%	6.6%	6.6%	6.8%	8.0%	5.9%
	SG&A ratio	-	-	-	-	-	-
Operating profit		5,696	10,830	16,950	21,368	9,246	15,885			76.0%	20,900
	YoY	31.7%	18.5%	-5.5%	2.1%	62.3%	46.7%				-2.2%
	Operating profit / sales revenue	2.3%	2.2%	2.2%	2.1%	4.3%	3.5%
	Operating profit margin	-	-	-	-	-	-				-
Pre-tax profit		6,849	11,771	18,072	23,036	8,519	15,430			69.2%	22,300
	YoY	45.9%	19.8%	-4.9%	3.6%	24.4%	31.1%				-3.2%
	Pre-tax profit / sales revenue	2.8%	2.4%	2.4%	2.3%	4.0%	3.4%
	Pre-tax profit margin	-	-	-	-	-	-				-
Quarterly net income		4,442	6,939	10,799	13,832	5,139	8,917			66.1%	13,500
	YoY	66.6%	25.5%	-4.7%	4.8%	15.7%	28.5%				-2.4%
	Profit / sales revenue	1.8%	1.4%	1.4%	1.4%	2.4%	2.0%
	Profit margin	-	-	-	-	-	-				-
Quarterly		FY03/23				FY03/24
(JPYmn)		Q1	Q2	Q3	Q4	Q1	Q2	Q3	Q4
Sales revenue		245,353	254,169	263,466	249,030	214,743	240,892
	YoY	18.5%	33.0%	1.8%	-10.8%	-12.5%	-5.2%
Gross profit		22,374	21,610	23,101	22,471	21,132	21,806
	YoY	7.4%	3.8%	7.4%	10.1%	-5.6%	0.9%
	Gross profit / sales revenue	9.1%	8.5%	8.8%	9.0%	9.8%	9.1%
	Gross profit margin	-	-	-	-	-	-
SG&A expenses		16,710	16,444	17,055	18,680	17,146	9,907
	YoY	0.4%	1.5%	0.4%	2.4%	2.6%	-39.8%
	SG&A expenses / sales revenue	6.8%	6.5%	6.5%	7.5%	8.0%	4.1%
	SG&A ratio	-	-	-	-	-	-
Operating profit		5,696	5,134	6,120	4,418	9,246	6,639
	YoY	31.7%	6.6%	-30.4%	47.3%	62.3%	29.3%
	Operating profit / sales revenue	2.3%	2.0%	2.3%	1.8%	4.3%	2.8%
	Operating profit margin	-	-	-	-	-	-
Pre-tax profit		6,849	4,922	6,301	4,964	8,519	6,911
	YoY	45.9%	-4.0%	-31.4%	53.5%	24.4%	40.4%
	Pre-tax profit / sales revenue	2.8%	1.9%	2.4%	2.0%	4.0%	2.9%
	Pre-tax profit margin	-	-	-	-	-	-
Quarterly net income		4,442	2,497	3,860	3,033	5,139	3,778
	YoY	66.6%	-12.7%	-33.5%	62.8%	15.7%	51.3%
	Profit / sales revenue	1.8%	1.0%	1.5%	1.2%	2.4%	1.6%
	Profit margin	-	-	-	-	-	-

Source: Shared Research based on company data
Note: Figures may differ from company materials due to differences in rounding methods.

1H FY03/24 results (out October 31, 2023)

Overview

In 1H FY03/24, Itochu Enex posted sales revenue of JPY455.6bn (-8.8% YoY). This was mainly due to a fall in the selling price of petroleum products on the back of lower prices of crude oil and LP gas.

Operating profit was JPY15.9bn (+46.7% YoY). Net profit attributable to Itochu Enex's shareholders was JPY8.9bn (+28.5% YoY). These results were mainly because of contributions from the electricity retail business and the car dealership business and a one-time gain from the sale of fixed assets for replacement of assets, despite the absence of benefit for the Industrial Business segment in 1H FY03/23 and a decrease in profit due to the impact of inventory unit price fluctuations on profit margins caused by a decline in LPG import prices in the Home-Life Division.

Breakdown of results by segment

By segment (cumulative)			FY03/23				FY03/24
(JPYmn)			Q1	Q1-Q2	Q1-Q3	Q1-Q4	Q1	Q1-Q2	Q1-Q3	Q1-Q4
Sales revenue			245,353	499,522	762,988	1,012,018	214,743	455,635
	YoY		18.5%	25.5%	16.1%	8.1%	-12.5%	-8.8%
	Home-Life		19,607	35,085	58,591	84,187	15,703	28,373
		YoY	8.8%	1.2%	7.8%	-0.9%	-19.9%	-19.1%
	Car-Life		132,133	273,440	416,858	563,647	139,218	298,388
		YoY	10.2%	11.3%	6.5%	4.7%	5.4%	9.1%
	Industrial Business		71,216	136,469	199,726	244,454	32,111	67,583
		YoY	39.2%	68.8%	37.0%	15.4%	-54.9%	-50.5%
	Power & Utility		22,397	54,528	87,813	119,730	27,711	61,291
		YoY	25.1%	48.1%	34.0%	18.4%	23.7%	12.4%
Operating profit			5,696	10,830	16,950	21,368	9,246	15,885
	YoY		31.7%	18.5%	-5.5%	2.1%	62.3%	46.7%
	Home-Life		410	242	561	2,042	-35	-418
		YoY	21.3%	-37.3%	-43.0%	-11.1%	-	-
	Car-Life		1,773	4,391	6,699	8,950	2,056	7,013
		YoY	17.7%	38.1%	16.2%	11.5%	16.0%	59.7%
	Industrial Business		2,023	5,011	7,995	8,526	965	1,474
		YoY	157.7%	136.1%	136.7%	83.7%	-52.3%	-70.6%
	Power & Utility		1,387	807	1,134	2,162	6,135	7,352
		YoY	-12.2%	-74.0%	-84.7%	-65.0%	342.3%	811.0%
By segment (quarterly)			FY03/23				FY03/24
(JPYmn)			Q1	Q2	Q3	Q4	Q1	Q2	Q3	Q4
Sales revenue			245,353	254,169	263,466	249,030	214,743	240,892
	YoY		18.5%	33.0%	1.8%	-10.8%	-12.5%	26.0%
	Home-Life		19,607	15,478	23,506	25,596	15,703	12,670
		YoY	8.8%	-7.2%	19.5%	-16.4%	-19.9%	-18.1%
	Car-Life		132,133	141,307	143,418	146,789	139,218	159,170
		YoY	10.2%	12.3%	-1.5%	-0.2%	5.4%	12.6%
	Industrial Business		71,216	65,253	63,257	44,728	32,111	35,472
		YoY	39.2%	119.6%	-2.5%	-32.3%	-54.9%	-45.6%
	Power & Utility		22,397	32,131	33,285	31,917	27,711	33,580
		YoY	25.1%	69.8%	16.0%	-10.4%	23.7%	4.5%
Operating profit			5,696	5,134	6,120	4,418	9,246	6,639
	YoY		31.7%	6.6%	-30.4%	47.3%	62.3%	37.9%
	Home-Life		410	-168	319	1,481	-35	-383
		YoY	21.3%	-	-46.7%	12.8%	-	-
	Car-Life		1,773	2,618	2,308	2,251	2,056	4,957
		YoY	17.7%	56.5%	-10.8%	-0.4%	16.0%	89.3%
	Industrial Business		2,023	2,988	2,984	531	965	509
		YoY	157.7%	123.5%	137.8%	-58.0%	-52.3%	-83.0%
	Power & Utility		1,387	-580	327	1,028	6,135	1,217
		YoY	-12.2%	-	-92.4%	-	342.3%	-

Source: Shared Research based on company data
Note: From FY03/20, the Mobility Life Division has been absorbed by the Life and Industrial Energy Division (in this table, segment figures for FY03/19 have not been retroactively adjusted). Operating profit excludes the adjusted amount.

Home-Life Division

	Home-Life	FY03/23				FY03/24
	(JPYbn)	Q1	Q2	Q3	Q4	Q1	Q2	Q3	Q4
Business metrics	LP gas direct sales customers ('000)	565	563	568	565	567	573
	Electricity retail customers ('000)	119	119	118	-	-	-
	LP gas sales volume ('000 tons)	107	85	119	141	102	80
Profit and loss	Gross profit	4.5	3.8	4.3	5.5	3.8	3.5
	SG&A expenses	-4.1	-4.0	-4.1	-4.0	-4.0	-3.9
	Operating profit	0.4	-0.2	0.4	1.4	0.0	-0.4
	Equity-method earnings	0.9	-0.1	0.3	1.0	-0.5	0.2
	Profit	0.9	-0.3	0.4	1.7	-0.5	-0.2
Affiliate earnings	Itochu Enex Home Life Nishi-Nihon	0.2	0.0	0.1	0.3	0.1	0.0
	Ecore	0.2	0.1	0.0	0.3	0.1	0.0
	Eneark	0.1	0.1	0.1	0.6	0.0	0.0

Source: Shared Research based on company data

In the Home-Life Division, sales revenue was JPY28.4bn (-19.1% YoY). This is primarily attributable to the fact that selling prices were lower than 1H FY03/23 due to a decline in LP gas import prices. Operating loss came to JPY418mn (operating profit of JPY242mn in 1H FY03/23), and net loss attributable to Itochu Enex's shareholders was JPY653mn (net profit of JPY583mn in 1H FY03/23). This was mainly due to the impact of inventory unit price fluctuations on profit margins caused by a decline in LPG import prices.

LP gas business: The number of direct sales customers for LP gas increased to 573,000, an increase of about 8,000 from end-FY03/23, thanks to the acquisition of new customers and sales rights. Sales volume for LP gas for households declined YoY because the average temperature was higher than a year earlier.

Car-Life Division

	Car-Life	FY03/23				FY03/24
	(JPYbn)	Q1	Q2	Q3	Q4	Q1	Q2	Q3	Q4
Business metrics	Gasoline sales volume ('000 kl)	515	565	547	502	517	570
	Kerosene ('000 kl)	68	27	240	316	87	-
	Diesel oil ('000 kl)	577	616	569	586	664	715
	New cars ('000 units)	6	6	6	7	6	7
	Pre-owned cars ('000 units)	5	4	4	5	4	5
Profit and loss	Gross profit	11.4	12.4	12.2	13.1	12.0	13.5
	SG&A expenses	-9.8	-9.8	-10	-10.6	-10.1	-10.1
	Operating profit	1.8	2.6	2.3	2.3	2.1	4.9
	Equity-method earnings	0.0	0	0	-0.1	0.0	0.1
	Profit	1	1.4	1.2	0.9	1	2.8
Affiliate earnings	Enex Fleet	0.6	0.5	0.6	0.3	0.4	0.8
Affiliate earnings	Osaka Car Life Group	0.2	0.3	0.2	0.4	0.3	0.6

Source: Shared Research based on company data

Sales revenue in the Car-Life Division reached JPY298.4bn (+9.1% YoY). This was mainly because the sales volume of various petroleum products increased. Operating profit came to JPY7.0bn (+59.7% YoY), and net profit attributable to Itochu Enex's shareholders reached JPY3.8bn (+62.0% YoY). This was primarily due to a temporary gain recorded on the sale of Car-Life Station sites (the impact of JPY1,5bn on operating profit).

In the Car-Life Station business, the number of Car-Life Stations declined by eight to 1,590. Car-Life Stations are the company's multi-service gas stations.

Petroleum product sales volume: Sales volume increased YoY as the impact of the COVID-19 pandemic subsided and demand for petroleum products has recovered.

Automobile related business: At Osaka Car Life Group, the subsidiary operating the car dealership business, new car sales were strong due to a recovery in semiconductor supply, and the total number of cars sold was larger than Q1 FY03/23.

Industrial Business Division

	Industrial Business	FY03/23				FY03/24
	(JPYbn)	Q1	Q2	Q3	Q4	Q1	Q2	Q3	Q4
Business metrics	Gasoline sales volume ('000 kl)	89	90	85	-	-	-
	Kerosene ('000 kl)	37	26	6	-	-	-
	Diesel oil ('000 kl)	211	260	214	-	-	-
	Heavy fuel oil ('000 kl)	473	423	363	307	256	249
	Asphalt ('000 tons)	50	62	55	91	55	69
	Industrial gas ('000 tons)	17	17	15	16	15	18
Profit and loss	Gross profit	3.7	4.7	4.8	2.1	2.5	2.2
	SG&A expenses	-1.5	-1.5	-1.5	-1.7	-1.5	-1.6
	Operating profit	2.0	3.0	3.0	0.5	1.0	0.5
	Equity-method earnings	0.0	0.0	0.1	0.0	0.0	0.1
	Profit	1.4	2.1	2.0	0.4	0.7	0.4

Source: Shared Research based on company data

Sales revenue in the Industrial Business Division reached JPY67.6bn (-50.5% YoY). This was mainly because selling prices of various petroleum products decreased along with lower crude oil prices, and sales volume declined. Operating profit was JPY1.5bn (-70.6% YoY), while net profit attributable to Itochu Enex's shareholders was JPY1.1bn (-69.0% YoY). This was mainly due to a reactionary decline in sales from the marine fuel sales business and the logistics terminal business, which performed well in Q1 FY03/23, despite strong performance of the marine fuel sales business.

Marine fuel sales business: Sales volume fell YoY due to a partial reduction in transactions for ocean-going vessels.

Environment-related business: Sales volume rose YoY as sales channels developed steadily for AdBlue^®.

The asphalt business: Sales volume increased YoY owing to the acquisition of new commercial rights and other factors.

Power and Utility Division

	Power & Utility	FY03/23				FY03/24
	(JPYbn)	Q1	Q2	Q3	Q4	Q1	Q2	Q3	Q4
Business metrics	Electricity (GWh)	485	619	398	508	419	546
	- High voltage (GWh)	334	403	193	246	205	262
	- Low voltage (GWh)	151	216	204	263	214	284
	Steam ('000 tons)	116	94	92	109	96	75
	Heat quantity ('000 J)	245	511	209	273	241	585
Profit and loss	Gross profit	2.8	0.7	1.8	1.8	2.8	2.6
	SG&A expenses	-1.4	-1.5	-1.6	-1.5	-1.7	-1.5
	Operating profit	1.4	-0.6	0.3	1.1	6.1	1.3
	Equity-method earnings	0.4	0.0	0.0	-0.1	0.1	0.2
	Profit	1.0	-0.7	0.1	0.6	3.9	0.5
Affiliate earnings	Enex Electric Power Group	0.2	0.2	0.4	0.1	0.2	0.2
	Enex Life Service	0.0	0.1	0.1	0.1	0.0	0.2
	Tokyo Toshi Service	0.2	0.4	0.0	-0.5	0.2	0.6
	Oji-Itochu Enex Power Retailing	0.1	0.1	0.3	0.1	0.1	0.0

Source: Shared Research based on company data
Notes: * Electricity retail sales are calculated from preliminary data and includes handling volume.
** Sales volume for Q1 FY03/22 and that for full- year FY03/22 have been revised from the data. Figures for Q2 onwards will be updated.

Sales revenue in the Power and Utility Division was JPY61.3bn (+12.4% YoY). This was mainly due to an increase in selling prices associated with a surge in resource prices. Operating profit was JPY7.4bn (+811.0% YoY), while net profit attributable to Itochu Enex's shareholders was JPY4.4bn (profit of JPY323mn in 1H FY03/23). This was mainly because of contribution from the electricity retail business thanks to revised selling prices and a one-time gain from the sale of a large solar (mega-solar) power plants (impact on operating profit: JPY5.0bn).

Electric power retailing business: Sales volume of low-voltage electricity increased YoY because of the acquisition of new contracts. Sales volume of high-voltage electricity fell YoY because the company focused on profitability. As a result, the overall customer count in the group declined by about 13,000 YoY to 321,000.

Heat supply business: In 1H FY03/24, the volume of supply rose slightly YoY because the use of air conditioners increased due to a YoY rise in the average temperature.

FY03/24 full-year forecast (out April 28, 2023)

	FY03/23			FY03/24			YoY
(JPYmn)	1H Act.	2H Act.	FY Act.	1H Act.	2H Est.	FY Est.	FY Est.
Sales revenue (IFRS)	499,522	512,496	1,012,018	455,635	744,365	1,200,000	18.6%
Gross profit	43,984	45,572	89,556	42,938
Gross profit / sales revenue	8.8%	8.9%	8.8%	9.4%
SG&A expenses	33,154	35,735	68,889	27,053
SG&A expenses / sales revenue	6.6%	7.0%	6.8%	5.9%
Operating profit	10,830	10,538	21,368	15,885	5,015	20,900	-2.2%
Operating profit / sales revenue	2.2%	2.1%	2.1%	3.5%	0.7%	1.7%
Pre-tax profit	11,771	11,265	23,036	15,430	6,870	22,300	-3.2%
Recurring profit / sales revenue	2.4%	2.2%	2.3%	3.4%	0.9%	1.9%
Profit attributable to owners of the parent	6,939	6,893	13,832	8,917	4,583	13,500	-2.4%
Operating profit / saes revenue	1.4%	1.3%	1.4%	2.0%	0.6%	1.1%

Source: Shared Research based on company data

Itochu Enex 8133