With the basic policy of "establishing the stable earnings base" and "shifting toward growth strategy" in the Third Consolidated Medium-Term Management Plan, the Cosmo Oil Group had steadily executed a variety of programs and investments. However, as crude oil prices are hovering at high levels, we were unable to secure appropriate margins. The result is that the earnings goals set out in the Third Plan were not met. In the Fourth Consolidated Medium-Term Management Plan for FY 2010-12, the Group will establish the business base and re-enhance the financial base for sustainable growth by "the oil refining and marketing business to return to profitability" and "increasing the portfolio of petrochemical and oil exploration and production businesses."
President,
Representative Director
Chief Executive Officer,
Cosmo Oil Co., Ltd.
[Business Environment]
It is expected that demand for petroleum and petrochemical products will likely show a moderate recovery outside Japan, while the demand for petroleum products in Japan may continue to decrease. This tells us that we need to assume that crude oil prices could remain high in the future.
[Basic Policy and Earnings Goals]
In the Fourth Consolidated Medium-Term Management Plan, the Group will move forward with rationalization and make maximum use of the results so far achieved, while continuing to invest in the petrochemical and oil exploration and production businesses.
These measures are intended to "establish the business base" and "re-enhance the financial base" while improving consolidated operating income (excluding inventory valuation impact) by ¥87.4 billion from FY 2009 to ¥69.0 billion in FY 2012.
Improvement of ¥87.4 billion in consolidated operating income, excluding the inventory valuation impact
Operating Income (excluding inventory valuation impact) (unit: billion yen)
Consolidated Business Outlook
(unit: billion yen)
| FY2012 Earnings Goals | Change from FY2009 | |
|---|---|---|
| Net sales | 2,643.0 | Up 30.9 |
| Operating income | 69.0 | Up 34.8 |
| Operating income (excluding the inventory valuation impact) | 69.0 | Up 87.4 |
| Net income | 33.0 | Up 43.7 |
| FY2012 Financial Goals | Change from FY2009 | |
|---|---|---|
| Interest-bearing debt | 602.0 | Down 175.7 |
| Total shareholder's equity | 374.0 | Up 58.3 |
Management index Goals
| FY2012 Financial Goals | Change from FY2009 | |
|---|---|---|
| ROE(%) | 9.1 | Improved by 12.4 points |
| Net worth ratio(%) | 25.4 | Improved by 6.2 points |
| Debt-to-equity (D/E) ratio (times) | 1.6 | Improved by 0.9 points |
| Net D/E ratio (times) | 1.3 | Improved by 0.4 points |
[Cash Flow Balances]
We have the basic policy of stable delivery of dividends as part of our efforts to return profits to our shareholders. We will also strictly select projects for investment and financing and endeavor to reduce interest-bearing debt as well as improve our financial structure.
Cash Flow Balan
[Investment and Loans]
[Investment and Loans]
About 65% of the total budget for investments and loans will be dedicated to the growth strategy. We will carry out strategic growth investments in the oil refining and marketing business by strictly selecting projects to invest in, while focusing our efforts on investing in the oil exploration and production and the petrochemical businesses.
Breakdown of the Investment Plan
