Idemitsu halves net profit outlook

TOKYO: Japanese oil refiner Idemitsu Kosan Co more than halved its profit forecast for the three years to March 2023 as the COVID-19 pandemic hit fuel demand, forcing it to make a tougher assumption for longer-term demand.

Idemitsu revised its 3-year business plan unveiled in November 2019, now predicting an accumulated net profit of 220 billion yen ($2 billion) for the three years ending March 2023, instead of its earlier target of 480 billion yen.

“It has only been a year and a half, but the environment has undergone tremendous changes with the unprecedented crisis of coronavirus pandemic, green recovery and carbon-neutral declaration by the Japanese government,” Idemitsu President Shunichi Kito told a news conference.

The company now estimates local demand for petroleum products will fall 30% by 2030 from 2019 levels, and 80% by 2050, instead of its 2019 assumption of 20% and 70% respectively.

“But we want to work positively by taking this as a turning point and an opportunity,” Kito said, citing a plan to turn some of its refineries into plaforms for advanced materials such as lithium solid electrolytes and for cleaner fuels such as renewable energy, hydrogen and ammonia.

The company also aims to achieve carbon neutrality by 2050 through energy and material transition, including a plan to slash its thermal coal output by making no investment in new mines.

Idemitsu, however, will continue the development of natural gas assets in Vietnam and other Asian countries to meet growing demand for the fuel, Kito said.