09 01-12 showa shell-results_q1

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09 01-12 showa shell-results_q1

  1. 1. (English Translation) Summary of Consolidated Second Quarter Results for 2012 31 July 2012 Listed Company Name: Showa Shell Sekiyu K. K. Listed Stock Exchange: Tokyo Stock Exchange 1st Section Code Number: 5002 URL http://www.showa-shell.co.jp Delegate: Title: President, Representative Director Name: Jun Arai Contact: Title: Controller, Corporate Officer Name: Tsutomu Yoshioka Phone: (03) 5531-5591 Expected date of quarterly report submission: 13 August 2012 Expected date of dividend payment: 6 September 2012 Supporting material for Quarter results: Applicable Quarter results briefing: Applicable (For analysts and institutional investors) (Note) Fractions of one million yen are rounded off.1. Consolidated financial results for 2nd quarter 2012 (from 1 January 2012 to 30 June 2012) (Note) Percentages represent changes from the same quarter of the previous year.(1) Consolidated financial results Sales Operating income Ordinary income Net income Million Yen % Million Yen % Million Yen % Million Yen % 2nd quarter 2012 1,310,887 (5.1) (10,875) - (12,501) - (12,590) - 2nd quarter 2011 1,380,935 18.0 67,642 293.5 68,818 219.0 37,244 221.6 (Reference) Comprehensive income 2Q 2012 (11,442) million yen ( - %) 2Q 2011 38,211 million yen ( - %) Diluted earnings Earnings per share per share Yen Yen 2nd quarter 2012 (33.43) - 2nd quarter 2011 98.89 - (2) Consolidated financial position Net assets (excl. minority Total assets Net assets interests) to total assets Million Yen Million Yen % 2nd quarter 2012 1,150,211 263,530 20.9 Full year 2011 1,208,442 279,152 21.2 (Reference) Net assets (excl. minority interest) 2Q 2012 240,027 million yen End of 2011 255,865 million yen2. Dividends Dividend per share (Record date) End of 1Q End of 2Q End of 3Q End of year Yearly Yen Yen Yen Yen Yen Full year 2011 - 9.00 - 9.00 18.00 Full year 2012 - 9.00 - - - Full year 2012 (Forecast) - - - 9.00 18.00 (Note) Revision of dividend forecast during this quarter: None3. Forecast of consolidated full year results 2012 (from 1 January 2012 to 31 December 2012) (Percentages represent changes from previous year) Sales Operating income Ordinary income Net income Earnings per share Million Yen % Million Yen % Million Yen % Million Yen % Yen Full year 2012 2,620,000 (5.5) 8,000 (86.7) 5,000 (91.9) (4,000) - (10.62) (Note) Revision of forecast of consolidated results : Applicable
  2. 2. 4. Others(1) Important change in scope of consolidated subsidiaries during the period : None(2) Adoption of uniquely adopted to prepare consolidated financial statements for the current quarter : None(3) Change in accounting principles and accounting estimates, and restatement a) Change in accounting principles due to amendment of accounting standards : None b) Change in accounting principles due to the reason except a) : None c) Change in accounting estimates : None d) Restatement : None(4) Issued shares (Common share) a) Number of shares issued As of 30 Jun. 2012 : 376,850,400 As of 31 Dec. 2011 : 376,850,400 (Inc. treasury shares) b) Number of treasury shares As of 30 Jun. 2012 : 226,774 As of 31 Dec. 2011 : 226,299 c) Average number of shares As of 30 Jun. 2012 : 376,623,862 As of 30 Jun. 2011 : 376,625,060 issued * Presentation regarding the status of implementation of the quarterly review procedures These quarterly results are exempt from the quarterly review procedures pursuant to the Financial Instruments and Exchange Act, and the review procedures with respect to the quarterly financial statements pursuant to the Financial Instruments and Exchange Act have not been completed as of the date of disclosure of such quarterly results. * Explanation regarding appropriate use of the forecast, other special instructions Figures in the above forecast are based on currently available information, and include various risks and uncertainty. Actual results could differ from this forecast due to changes in economic conditions, market trends, exchange rate and other factors. Please refer to “1. (3) Qualitative information concerning the forecast of consolidated financial results” in [Supporting material] on page 3.
  3. 3. 〔 Supporting material 〕 Contents 1.Qualitative information and financial statements etc. P.2 (1) Qualitative information concerning consolidated financial results P.2 (2) Qualitative information concerning consolidated financial position P.3 (3) Qualitative information concerning the forecast of consolidated financial results P.3 2. Notes P.4 (1) Important change in scope of consolidated subsidiaries during the period P.4 (2) Adoption of uniquely adopted to prepare consolidated financial statements for the P.4 current quarter (3) Change in accounting principles and accounting estimates, and restatement P.4 (4) Additional information P.4 3. Consolidated financial statements P.5 (1) Consolidated balance sheets P.5 (2) Consolidated statement of income and Consolidated statement of comprehensive P.7 income Consolidated statement of income P.7 Consolidated statement of comprehensive income P.8 (3) Consolidated Statement of Cash Flows P.9 (4) Note for premises of going concern P.10 (5) Segment information P.10 (6) Note in case of significant change in shareholders equity P.10 -1-
  4. 4. 1. Qualitative information and consolidated financial statements etc.(1) Qualitative information concerning consolidated financial resultsThe Japanese economy for the second quarter 2012 (from January 1, 2012, to June 30, 2012) saw strong private consumptionand public investment against the backdrop of demand for post-quake reconstruction funds, in spite of continuing overalldifficult conditions. On the other hand, exports, which have been affected by the weakness in the global economy and theappreciation of the yen have gradually been recovering as far as exports to Asia and the United States are concerned, andcorporate production activities have returned to a moderate recovery track. Consequently, the economy was on a moderaterecovery trend as a whole.As for the international situation surrounding crude oil prices, following the speculation on global supply and demandincreasingly becoming tight due to further reinforced economic sanctions against Iran which dominated the market until earlyspring, there has been a growing pessimistic view of decrease in demand driven by concerns over a prolonged globaleconomic recession. The Dubai crude oil price, a representative crude oil price index, started at the 105-dollar-per-barrellevel at the beginning of the year and once exceeded 120 dollars per barrel. After spring, however, the crude oil price beganto plunge and closed the second quarter at the 92-dollar-per-barrel level. (Crude oil prices and foreign exchange rate) The Dubai Exchange rate Exchange rate crude oil price (JPY/USD) (JPY/EUR) (USD/Barrel) 2Q/2011 105.8 82.0 115.0 2Q/2012 111.3 79.8 103.5 Difference 5.5 (2.2) (11.5) (Note) These are the average figures during the period.In such a business environment, the Showa Shell Sekiyu Group posted consolidated sales of 1,310.8 billion yen (a decreaseof 5.1% compared to the same period a year ago), consolidated operating loss of 10.8 billion yen (a decrease of 78.5 billionyen compared to the same period a year ago), consolidated ordinary loss of 12.5 billion yen (a decrease of 81.3 billion yencompared to the same period a year ago) for the current six-month period of 2012. In addition, the relevant consolidatedordinary loss, excluding the impact of the inventory valuation, was 6.2 billion yen, a decrease of 36.5 billion yen comparedto the same period a year ago.The business results by segment are as follows.[Petroleum business]Oil products of the Group sold well domestically due to aggressive sales of middle distillate products and the continuedstrong demand for power generation. As for the domestic supply and demand conditions, operations have resumed at oilrefineries that had suspended production after the earthquake. On the other hand, no significant slackening in supply anddemand conditions has been observed as some refineries incurred a decrease in production due to planned maintenance, andother operational problems. However, petroleum product margins in the domestic market remained at low levels, especiallyin the second quarter, mainly affected by sharp volatility in crude oil prices. -2-
  5. 5. As a result, with regard to the oil business, sales amounted to 1,276.8 billion yen, a decrease of 5.8% versus a year ago. Asfor profit and loss, we posted an operating income of 0.4 billion yen, a decrease of 77.1 billion yen versus a year ago. Therelevant consolidated ordinary income excluding the effects of inventory valuation was 6.7 billion yen, a decrease of 32.3billion yen versus a year ago.[Energy solution businesses]In the domestic market, forecast of rapid growth in demand toward the future is supported by evidence of upward demanddriven by a new feed-in tariff (FIT) system for renewable energy sources which has been implemented in July 2012. TheGroup also is experiencing stable sales growth buoyed by such factors as being chosen by Lawson, Inc., a Japaneseconvenience store chain, to supply CIS thin-film modules as part of plans to install solar panels on 2,000 of its Japan-basedstores.In the overseas markets, we have signed module supply agreements for large-scale solar power plants to be constructed inCalifornia and New Jersey, USA, and in addition, announced the start of operation of a large-scale CIS thin-film solar powerplant using our modules in Brandenburg, Germany. Regarding the business environment, in spite of a slowdown in the rate ofprice declines in overseas markets, competition remains intense.With regard to the electric power business, we contributed to a reduction in the gap between electricity supply and demandby supplying electricity generated by the Group to general electric utilities.The Energy Solution business segment, including the above-mentioned activities, reported sales of 29.4 billion yen (anincrease of 40.7% versus a year ago) and an operating loss of 12.0 billion yen (a decrease of 1.2 billion yen versus a yearago).[Other businesses]Other business segment reported sales of 4.5 billion yen and an operating income of 0.7 billion yen for the period.(2) Qualitative information concerning consolidated financial positionTotal assets reached 1,150.2 billion yen at the end of the second quarter, a decrease of 58.2 billion yen from the end of theprevious year. This was mainly attributable to the decrease in accounts receivable due to the effects of seasonality.Consolidated total liabilities were 886.6 billion yen, a decrease of 42.6 billion yen compared with the end of the previousyear. Short and long-term interest-bearing liabilities (borrowings, CP, and bonds) were 296.7 billion yen, an increase of18.3 billion yen from the end of the previous year.Net assets reached 263.5 billion yen, a decrease of 15.6 billion yen from the end of the previous year. This was mainlyattributable to negative factors, such as net loss for the current six-month period. As a result, capital adequacy stands at20.9% at the end of the second quarter of the current consolidated financial year.(3) Qualitative information concerning the forecast of consolidated financial resultsAs for the outlook for full year of 2012, we have revised the previous forecast originally released on 14th February 2012.Please refer to “Announcement of revisions in the forecast of full year results 2012” released today for details. -3-
  6. 6. 2. Notes(1) Important change in scope of consolidated subsidiaries during the periodNone(2) Adoption of uniquely adopted to prepare consolidated financial statements for the current quarterNone(3) Change in accounting principles and accounting estimates, and restatementNone(4) Additional informationa) Application of “Accounting Standard for Accounting Changes and Error Corrections”For accounting changes and error corrections made after the beginning of the first quarter, the “Accounting Standard forAccounting Changes and Error Corrections” (ASBJ Statement No.24, December 4, 2009) and the “Guidance on AccountingStandards for Accounting Changes and Error Corrections” (ASBJ Guidance No.24, December 4, 2009) have been applied.b) Application of Hedge accountingUntil last year, gains and losses with respect to forward exchange contract for hedging of forecasted transactions denominatedin foreign currencies and commodity futures contract for hedging of export of oil products were recognised by estimating thefair value of the contract. However, the group has adopted hedge accounting and has applied deferred hedge accounting for thecontract which meets the criteria of hedge accounting from this first quarter.The group has adopted hedge accounting because the group reviewed the risk management system regarding financialinstruments and improved the environment for the adoption of hedge accounting. This change was made in order to present thegroup’s financial position and financial results more properly, by appropriately reflecting in financial statements its initiativesto manage the risk of exchange rate and price variation of commodities. -4-
  7. 7. 3. Consolidated Financial Statements(1) Consolidated balance sheet (Unit:Million Yen) Previous year end Current 2nd quarter end As of 31 Dec. 2011 As of 30 Jun. 2012Assets Current assets  Cash and deposits 15,562 17,154  Notes and accounts receivable-trade 325,622 264,324  Merchandise and finished goods 143,721 157,226  Work in process 943 1,351  Raw materials and supplies 129,280 119,430  Other 44,429 58,962  Allowance for doubtful accounts (856) (341)  Total current assets 658,704 618,108 Noncurrent assets  Property, plant and equipment   Buildings and structures, net 109,486 106,427   Machinery, equipment and vehicles, net 167,247 157,205   Land 158,856 158,071   Other, net 18,981 20,137   Total property, plant and equipment 454,571 441,842  Intangible assets 11,031 10,419  Investments and other assets   Other 84,886 80,576   Allowance for doubtful accounts (750) (735)   Total investments and other assets 84,135 79,841  Total noncurrent assets 549,737 532,103 Total assets 1,208,442 1,150,211Liabilities Current liabilities  Notes and accounts payable-trade 294,276 263,225  Short-term loans payable 58,340 74,665  Accounts payable-other 177,452 149,174  Income taxes payable 3,725 2,065  Provision 2,391 2,380  Commercial papers 52,000 55,000  Other 50,166 69,543  Total current liabilities 638,351 616,055 Noncurrent liabilities  Bonds payable 35,000 20,000  Long-term loans payable 133,022 132,043  Provision for retirement benefits 75,335 75,414  Provision for special repairs 16,308 14,159  Other provision 479 ―  Other 30,791 29,008  Total noncurrent liabilities 290,938 270,626 Total liabilities 929,290 886,681 -5-
  8. 8. (Unit:Million Yen) Previous year end Current 2nd quarter end As of 31 Dec. 2011 As of 30 Jun. 2012Net assets Shareholders equity  Capital stock 34,197 34,197  Capital surplus 22,113 22,113  Retained earnings 199,182 183,201  Treasury stock (184) (184)  Total shareholders equity 255,308 239,327 Accumulated other comprehensive income Valuation difference on available-for-sale 557 627 securities  Deferred gains or losses on hedges ― 72  Total accumulated other comprehensive 557 699 income Minority interests 23,286 23,503 Total net assets 279,152 263,530Total liabilities and net assets 1,208,442 1,150,211 -6-
  9. 9. (2) Consolidated statement of income and Consolidated statement of comprehensive incomeConsolidated statement of income (Unit:Million Yen) Year-To-Date Year-To-Date From 1 Jan. 2011 From 1 Jan. 2012 To 30 Jun. 2011 To 30 Jun. 2012Net sales 1,380,935 1,310,887Cost of sales 1,250,340 1,257,682Gross profit 130,595 53,205Selling, general and administrative expenses Freightage related expenses 18,691 19,373 Personal expenses 17,865 17,743 Other 26,396 26,963 Total selling, general and administrative expenses 62,953 64,080Operating income (loss) 67,642 (10,875)Non-operating income Interest income 113 88 Dividends income 218 454 Foreign exchange gains 398 ― Equity in earnings of affiliates 1,408 ― Gain on investments in silent partnership 897 761 Reversal of allowance for doubtful accounts ― 480 Other 727 912 Total non-operating income 3,763 2,697Non-operating expenses Interest expenses 2,120 2,187 Foreign exchange losses ― 613 Equity in losses of affiliates ― 640 Other 465 882 Total non-operating expenses 2,586 4,323Ordinary income (loss) 68,818 (12,501)Extraordinary income Gain on sales of noncurrent assets 7,004 1,247 Subsidy 298 1,786 Other 1,417 316 Total extraordinary income 8,721 3,350Extraordinary loss Loss on disposal of noncurrent assets 1,451 943 Loss on valuation of investment securities 17 841 Impairment loss 293 268 Loss on adjustment for changes of accounting standard 1,754 ― for asset retirement obligations Loss from the earthquake 1,484 ― Other 918 186 Total extraordinary losses 5,920 2,240Income (loss) before income taxes and minority interests 71,619 (11,391)Income taxes-current 2,482 1,897Income taxes-deferred 30,919 (1,698)Total income taxes 33,402 199Income (loss) before minority interests 38,216 (11,591)Minority interests in income 972 999Net income (loss) 37,244 (12,590) -7-
  10. 10. Consolidated statement of comprehensive income (Unit:Million Yen) Year-To-Date Year-To-Date From 1 Jan. 2011 From 1 Jan. 2012 To 30 Jun. 2011 To 30 Jun. 2012Income (loss) before minority interests 38,216 (11,591)Other comprehensive income Valuation difference on available-for-sale securities 89 79 Deferred gains or losses on hedges ― 72 Share of other comprehensive income of associates accounted for (95) (2) using equity method Total other comprehensive income (5) 148Comprehensive income 38,211 (11,442)Comprehensive income attributable to Comprehensive income attributable to owners of the parent 37,231 (12,448) Comprehensive income attributable to minority interests 979 1,005 -8-
  11. 11. (3) Consolidated Statement of Cash Flows (Unit:Million Yen) Year-To-Date Year-To-Date From 1 Jan. 2011 From 1 Jan. 2012 To 30 Jun. 2011 To 30 Jun. 2012Net cash provided by (used in) operating activities Income (loss) before income taxes and minority interests 71,619 (11,391) Depreciation and amortization 20,501 21,734 Impairment loss 293 268  Loss on adjustment for changes of accounting standard for 1,754 ― asset retirement obligations  Loss (gain) on sales and retirement of noncurrent assets (5,553) (304) Interest and dividends income (331) (542) Interest expenses 2,120 2,187 Decrease (increase) in notes and accounts receivable-trade (14,644) 61,297 Decrease (increase) in inventories (69,171) (4,061) Increase (decrease) in notes and accounts payable-trade 27,549 (49,803) Other, net (13,867) (17,726) Subtotal 20,270 1,658 Interest and dividends income received 337 550 Interest expenses paid (2,100) (2,233) Income taxes (paid) refund (2,250) (3,816) Net cash provided by (used in) operating activities 16,256 (3,840)Net cash provided by (used in) investing activities Purchase of property, plant and equipment (29,118) (10,890) Purchase of intangible assets (1,363) (592) Proceeds from sales of property, plant and equipment 12,763 2,071 Purchase of investment securities (3) (69) Proceeds from sales of investment securities 2 ― Decrease (increase) in short-term loans receivable 2,936 1,153 Payments of long-term loans receivable (0) (2) Collection of long-term loans receivable 1 3 Other, net 566 (219) Net cash provided by (used in) investing activities (14,215) (8,546)Net cash provided by (used in) financing activities Net increase (decrease) in short-term loans payable 15,030 16,689 Increase (decrease) in commercial papers (48,000) 3,000 Proceeds from long-term loans payable 35,300 ― Repayment of long-term loans payable (1,362) (1,143) Purchase of treasury stock (0) (0) Cash dividends paid (3,390) (3,390) Cash dividends paid to minority shareholders (541) (574) Other, net (540) (702) Net cash provided by (used in) financing activities (3,505) 13,878Net increase (decrease) in cash and cash equivalents (1,465) 1,491Cash and cash equivalents at beginning of period 19,746 14,466Decrease in cash and cash equivalents resulting from exclusion of (111) ―subsidiaries from consolidationCash and cash equivalents at end of period 18,170 15,958 -9-
  12. 12. (4) Note for premises of going concern None(5) Segment InformationPrevious 2nd Quarter (From 1 January to 30 June 2011) Energy Consoli- Oil business Solution Subtotal Others Total Adjustment dated Business Sales (1) Sales to customers 1,355,252 20,913 1,376,166 4,769 1,380,935 - 1,380,935 (2) Inter-segment sales and 1,198 2,080 3,278 1,065 4,344 (4,344) - transfers Total 1,356,450 22,994 1,379,445 5,835 1,385,280 (4,344) 1,380,935 Operating 77,572 (10,811) 66,761 888 67,650 (8) 67,642 Income/(loss)Notes: 1. The “Others” category incorporates operations not included in business segments reported, including leasing and administration of properties, construction works, sale and lease of auto accessories etc. 2. Adjustment of operating income (loss) refers to elimination of intersegment transactions. 3. Operating income (loss) for segment is adjusted on operating income on the consolidated statements of income for the first half of the current consolidated financial year.Current 2nd Quarter (From 1 January to 30 June 2012) Energy Consoli- Oil business Solution Subtotal Others Total Adjustment dated Business Sales (1) Sales to customers 1,276,871 29,416 1,306,288 4,599 1,310,887 - 1,310,887 (2) Inter-segment sales and 3,860 2,525 6,386 2,063 8,449 (8,449) - transfers Total 1,280,732 31,942 1,312,674 6,663 1,319,337 (8,449) 1,310,887 Operating 470 (12,041) (11,571) 722 (10,849) (25) (10,875) Income/(loss)Notes: 1. The “Others” category incorporates operations not included in business segments reported, including leasing and administration of properties, construction works, sale and lease of auto accessories etc. 2. Adjustment of operating income (loss) refers to elimination of intersegment transactions. 3. Operating income (loss) for segment is adjusted on operating loss on the consolidated statements of income for the first half of the current consolidated financial year.(6) Note in case of significant change in shareholders equity None - 10 -

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