INPEX posted an 18 percent rise in first-half profit even as revenue fell, and it used the improvement to raise its full-year profit guidance to a record ¥510.0bn while simultaneously cutting its full-year revenue forecast. Profit attributable to owners of the parent rose to ¥263.1bn in the six months to June, up 17.7 percent from a year earlier, on revenue of ¥1.00tn, down 4.6 percent.
The revenue decline traces to Abu Dhabi. Crude sales volume fell 22.8 percent to 55.17 million barrels in the half as fighting in the Middle East curtailed loadings, and INPEX now expects full-year Abu Dhabi sales to come in about 30 percent below its May forecast. The company said production had recovered to close to normal levels by June and that shipments continue through Fujairah, avoiding the Strait of Hormuz, though some offshore fields still face loading constraints.
What offset the volume hit was price and mix. The average overseas crude price rose 8.2 percent to $79.51 a barrel, the yen weakened 6.7 percent to an average of ¥158.37 to the dollar, and the Ichthys LNG project in Australia lifted its profit contribution 24.5 percent to ¥173.0bn for the half.
Those swings fed directly into the guidance revision. INPEX cut its full-year revenue forecast to ¥1.97tn from a prior range of ¥2.00tn to ¥2.29tn, but raised its net profit forecast to ¥510.0bn from a prior range of ¥350.0bn to ¥450.0bn, above the top end of its own scenario band from May. It also revised its full-year Brent assumption up to $81.4 a barrel, from a prior $70 to $83 range, and its yen assumption to ¥159.2 to the dollar, from a prior ¥154 to ¥156, effectively planning for a weaker currency through the second half.
| Metric | May Forecast | August Forecast |
|---|---|---|
| Revenue | ¥2.00tn – ¥2.29tn | ¥1.97tn |
| Operating profit | ¥1.09tn – ¥1.37tn | ¥1.22tn |
| Pre-tax profit | ¥1.13tn – ¥1.42tn | ¥1.28tn |
| Net profit (attributable to owners) | ¥350.0bn – ¥450.0bn | ¥510.0bn |
| Full-year Brent assumption | $70.0 – $83.0/bbl | $81.4/bbl |
| Full-year USD/JPY assumption | ¥154.0 – ¥156.0 | ¥159.2 |
The board also approved a share buyback of up to 50 million shares, 4.3 percent of shares outstanding excluding treasury stock, for up to ¥140.0bn, running from August 10 through December 31 via market purchases on the Tokyo Stock Exchange. Separately, INPEX raised its interim dividend to ¥56 a share from a previously forecast ¥54, and lifted its full-year dividend forecast to ¥112 a share from ¥108, up from ¥100 the year before, taking the total payout ratio to about 53 percent.
At the results briefing, management said it judged its own shares undervalued relative to the company's growth outlook, citing that view alongside the record profit guidance as the rationale for combining the buyback with the dividend increase.