Cosmo Energy Holdings reported net profit attributable to owners of ¥147.4bn for the six months to 30 September 2026, against ¥23.6bn a year earlier. Sales were ¥1.56tn, up 17.2%, and operating profit rose to ¥224.8bn from ¥60.3bn. The cash flow statement and the unchanged annual forecast tell a more cautious story.
Refining carries the result
The oil segment earned a segment profit of ¥211.5bn, up ¥187.4bn on the year, which the company attributes to higher crude prices. Dubai crude opened the period in the $108 range, dropped to $63 at one point and ended at about $106, according to the half-year securities report. Petrochemicals swung to a ¥9.1bn segment profit from a ¥2.2bn loss as product prices improved.
Upstream went the other way. Oil development segment profit fell ¥19.1bn to ¥5.0bn and sales fell ¥37.4bn to ¥28.0bn. The company says production constraints linked to the blockade of the Strait of Hormuz cut sales volumes. That is the company's own attribution; the filings do not independently describe current conditions in the strait.
One accounting item also helped. Two ethylene-producing subsidiaries lengthened the useful lives of some plant and tanks after a March 2025 decision to concentrate ethylene output at Chiba. Against the old lives, that added ¥1.8bn each to operating, ordinary and pretax profit.
Cash did not follow
Operating cash flow was negative ¥1.2bn, compared with a positive ¥120.4bn a year earlier. The company says the main cause was the inventory increase. The cash flow statement shows inventories absorbing ¥485.4bn, partly offset by a ¥366.2bn rise in trade payables.
The balance sheet shows the same build. Raw materials and supplies stood at ¥589.4bn, against ¥229.8bn at the end of March, and merchandise and products at ¥321.6bn, against ¥195.7bn. Total assets rose ¥569.9bn to ¥2.77tn, mainly on inventories. Borrowing filled part of the gap: ¥40.6bn of new long-term loans, ¥9.9bn of bonds and a ¥10.0bn net increase in commercial paper. Cash and equivalents ended at ¥80.7bn, and the equity ratio slipped to 26.8% from 27.6% at the end of March.
Guidance stays where it was
The earnings release says the full-year forecast published on 12 May 2026 is unchanged: sales of ¥2.87tn, operating profit of ¥102.0bn, ordinary profit of ¥115.0bn and net profit of ¥44.0bn, which would be 40.6% lower than the previous year. Six-month operating profit of ¥224.8bn and net profit of ¥147.4bn already exceed those full-year figures. The release gives no explanation for holding the forecast and no second-half assumptions.
The board declared an interim dividend of ¥75 per share, payable from 7 December. The year-end dividend forecast is ¥90, for a ¥165 total, with no change to the previous dividend forecast.
Loan terms and review status
On 30 April 2026 the subsidiary Cosmo Oil signed a loan agreement with an independent administrative agency for ¥93.9bn of principal, due on 30 April 2027, with financial covenants. These cover a significant net deficit at the latest results and three consecutive years of ordinary or after-tax losses; breach, together with a lender's demand, would forfeit the benefit of the term. The earnings release is outside auditor or accountant review.