Summary of Consolidated Financial Results for the Six Months Ended September 30, 2023 [Based on Japanese GAAP] ( 150KB )

During the six months ended September 30, 2023, the Japanese economy normalized since COVID-19 was reclassified to category 5 of infectious diseases. In the energy industry that surrounds our group, there has been a recovery in demand for aviation fuel and other products due to an increase in consumer spending, mainly in travel and inbound demand. However, there are concerns about a decline in household consumption caused by rising prices and other factors.
Under these circumstances, SAN-AI OBBLI Group promoted human resource development and new business development in order to build a business portfolio that responds to a low-carbon, recycling-oriented society based on our medium-term management plan, “Challenge for the Transforming Future 2030,” which is our vision for Fiscal Year 2030

During the six months ended September 30, 2023, net sales of our group increased by 3.2% year-on-year to 318,066 million yen due to an increase in the sales price of petroleum products. Operating profit increased by 30.1% year-on-year to 8,666 million yen due to strong performance in the Aviation-related business, Ordinary profit increased by 28.5% year-on-year to 9,121 million yen, and profit attributable to owners of parent increased by 23.4% year-on-year to 5,640 million yen.

Results by business segment are as follows.

In the Petroleum-related business, sales volume remained at the same level as the same period of the previous year, but net sales were up year-on-year due to an increase in sales prices.
The status of each division is as follows.
In the Petroleum retail division, sales volume and earnings both fell year-on-year due to fell sales in directly managed Service Stations.
In the Petroleum wholesale division, profits increased year-on-year due to an increase in profits from inventory valuations.
In the Industrial fuel oil sales division, despite efforts to acquire new customers, sales volume and profits decreased year-on-year due to a decreased in sales volume to existing customers.
In the industrial lubricants oil sales division, profits increased year-on-year due to higher commission income from gas engine maintenance and wind power endoscopy inspections.

Consequently, net sales in the Petroleum-related business increased by 3.8% year-on-year to 275,877 million yen due to higher sales prices. Segment profit increased by 1.5% year-on-year to 5,146 million yen due to higher profits from inventory valuations in the petroleum wholesale division.

In the Chemical Products-related business, while sales volume of each product remained at the same level as the same period of the previous year.
The status of each product is as follows.
In Automotive-related products, profits increased year-on-year due to strong sales of water-repellent coating for car wash machines that are the company’s own products.
In the Biocide, despite a decline in sales volume to applications such as metalworking oils due to a decrease in operating rates at automotive-related plants in line with a shortage of parts, profits rose year-on-year due to a recovery in profit margins.
In Tackifier, profits decreased year-on-year due to lower sales volumes for petroleum resin and packaging tape applications.
In Solvent and Industrial chemicals, both sales volume and profits remained at the same level as the same period of the previous year.

Consequently, net sales in the Chemical Products-related business decreased by 0.3% year-on-year to 5,937 million yen. Segment profit decreased by 23.9% year-on-year to 414 million yen due to lower profits from Tackifier.

In LPG sales business, sales volume was generally on a decreasing trend.
The status of each division is as follows.
In the Retail division, although unit consumption declined mainly for household use due to the heat wave during the summer, profits increased year-on-year due to the acquisition of new customers and the acquisition of retail goodwill, which resulted in an increase in the number of customers and an improvement in profit margins.
In the Wholesale division, profits fell significantly year-on-year due to the impact of inventory valuations.
Since 2021, the worldwide shortage of electronic components has caused delays in the delivery of residential equipment, including water heaters, but this has been eliminated since April 1,2023.

In the Natural gas business, despite a decline in residential demand, sales volume increased year-on-year in the commercial and industrial sectors due to the acquisition of new customers. However, profits decreased year-on-year due to an increase in the purchase price due to an increase in the cost of suppliers.

Consequently, net sales in the Gas-related business decreased by 12.0% year-on-year to 24,356 million yen due to a decline in sales prices of LPG. Segment profit decreased by 64.8% year-on-year to 270 million yen due to a decrease in profits as a result of inventory valuations in the wholesale division.

In the Aviation fuel business, air travel demand was strong due to an increase in foreign visitors to Japan and transition to category 5 of COVID-19 infectious diseases.
Demand for air travel at Haneda Airport remained at the same level as in FY2019 before the COVID-19 pandemic on domestic airline. On international airline, demand at Haneda Airport increased significantly due to an increase in the number of foreign visitors to Japan. As a result, the volume of fuel handled on both domestic and international airline increased by about 15% compared to FY2019, prior to the COVID-19 pandemic.

Consequently, net sales in the Aviation-related business increased by 61.5% year-on-year to 9,460 million yen due to an increase in the volume of fuel handled at Haneda Airport. Segment profit increased by 4,356 million yen (compared with segment profit of 1,130 million yen in the same period of the previous fiscal year).

In the Other businesses, net sales decreased year-on-year, because in the cleaning and surface treatment business for metal products and other products, orders for precision cleaning treatment were sluggish due to production adjustments by semiconductor manufacturers in line with the contraction of the semiconductor market. In addition, due to sluggish orders for large-scale properties, net sales in the construction industry also decreased year-on-year.

Consequently, net sales decreased by 18.6% year-on-year to 2,434 million yen due to sluggish sales in the cleaning and surface treatment industries for metal products, etc., and segment income decreased by 53.3% year-on-year to 292 million yen.