TOKYO (Reuters) - Japan's oil and metals giant Eneos Holdings Inc 5020.T on Wednesday more than doubled its net profit forecast for the year to next March, saying it expected an appraisal gain on its oil inventories because of higher-than-expected crude prices.
It now forecasts a net profit of 90 billion yen ($855 million) for the current financial year, up from its May estimate of 40 billion yen, as it now expects an appraisal gain of 10 billion yen on its oil inventories, compared with its May forecast of a loss of 55 billion yen.
Japan’s biggest oil refiner also expects economic damage from the COVID-19 pandemic to ease in the October-March period, predicting its key fuel sales would fall by 3% on year by the pandemic, less than the 8% decline in the first half, said Soichiro Tanaka, Eneos’ senior vice president.
Faced with collapsing demand from the pandemic and depressed overseas markets, its refineries’ run rate fell to 60-70% in the first half, but Eneos expects an improvement in the second half because of higher demand for kerosene during the winter, Tanaka said.
“Still, our run rate will depend on how much recovery we will see in overseas fuels markets,” he said.
Its metals unit, JX Nippon Mining & Metals Corp, said on Monday it had agreed to buy the stakes in its Caserones copper mine in Chile owned by its partners Mitsui Mining and Smelting 5706.T and Mitsui & Co 8031.T for an undisclosed sum.
JX, a miner and smelter, plans to boost output of the mine, but the decision does not mean any changes in its metal strategy to reinforce mid- and downstream operations, Tanaka said.
“In general, it is possible to seek a new partner for the project, but there is no immediate plan like that,” he said.
($1 = 105.2700 yen)
Reporting by Yuka Obayashi; Editing by Muralikumar Anantharaman and Gerry Doyle
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