5019.T

• Integrated Supply Chain Structure

  • The firm manages the full value chain from crude procurement, refining, chemical processing, distribution, service stations, and high-performance materials, allowing it to capture broad benefits from refining margins, inventory impacts, exports, and material sector spillovers even during periods of high crude prices
  • Cash flow generated by the core Fuel Oil and Resources segments is cycled into investment for new growth businesses, leveraging existing profitability to fund long-term expansion
  • The firm can convert sulfur, a byproduct of petroleum refining, into high-value solid electrolyte material for all-solid-state batteries, creating added value from existing operations

• Long-Term Growth Initiative: All-Solid-State Battery Materials

  • Idemitsu Kosan has made a final investment decision and started construction of a large-scale pilot facility for solid electrolytes for all-solid-state batteries, with an expected annual production capacity of hundreds of tons and targeted completion in 2027
  • The firm has collaborated with Toyota Motor Corporation since 2023: Idemitsu leads mass production demonstration, while Toyota leads development of all-solid-state batteries and electric vehicles using the material, aligned with Toyota's 2027-2028 commercialization target for all-solid-state batteries
  • A large-scale production facility for lithium sulfide, a key intermediate material for solid electrolytes, is also scheduled for completion in June 2027. A fully integrated value chain from petroleum-derived raw materials to intermediate materials to finished products could reposition the firm beyond its current image as a fossil fuel-focused company

• Shareholder Return Policy

  • The firm targets a total payout ratio of 50% or higher based on net income excluding inventory impacts, prioritizing underlying performance over accounting profits that fluctuate with crude oil market conditions
  • The forecast annual dividend for the 2026 March fiscal year is 36 yen per share

• No full-year financial revenue or profit guidance is explicitly revised or provided in the summary transcript beyond the stated dividend forecast of 36 yen per share for the 2026 March fiscal year
• Capital expenditure guidance for the solid electrolyte and lithium sulfide production facilities is tied to completion targets: the large pilot solid electrolyte facility is targeted for completion in 2027, and the lithium sulfide facility is targeted for completion in June 2027, with no changes to these stated timelines

Idemitsu Kosan operates 5 business segments, with 2025 March fiscal year revenue contribution shares as follows: 1. Fuel Oil: 83.7% of total revenue, focused on processing crude oil into gasoline, diesel, aviation fuel, and marine fuel. 2. Basic Chemicals: 6.4% of total revenue, covering basic petrochemical feedstocks such as ethylene and paraxylene. 3. High-Performance Materials: 5.5% of total revenue, including lubricants, functional chemicals, and battery materials. 4. Resources: 2.9% of total revenue, covering oil development and coal production/sales. 5. Power & Renewable Energy: 1.4% of total revenue. No absolute financial results for individual segments are provided in the transcript beyond profit sensitivity data.

• A $10 per barrel change in crude oil prices can move the Fuel Oil segment operating profit by up to 68 billion yen including inventory impacts, meaning short-term performance is heavily exposed to crude oil market volatility
  • High crude prices tend to boost short-term profits, but extended volatility or supply disruption creates downside risk
• As of fiscal 2023, Japan's crude oil imports are 94.7% dependent on the Middle East. Prolonged heightened tension in the Middle East creates significant supply uncertainty for crude procurement, which can act as a downside drag on performance

No formal question and answer section is included in the provided transcript summary; a public online IR seminar with live Q&A is scheduled for May 25, 2026, but no Q&A content is available in this material.