Segment

The ENEOS Group has businesses in six segments: petroleum products, high performance materials, electricity, renewable energy, oil and natural gas E&P, and metals. Net operating profit for each business segment are disclosed in financial statements.
Below are business areas covered by each business segment and analysis of profit and loss.

◆Manufacture and sale of petroleum products and basic chemical
◆Incubation (SAF, hydrogen, synthetic fuels, etc.)

Our main earning base is from refining and sale of petroleum products such as gasoline, kerosene, and diesel fuel, for which we maintain Japan's top market share. Net profit fluctuates depending on factors like the margins of each kind of product which reflect circumstances like supply and demand inside and outside Japan as well as crude oil prices*, but we are making efforts to strengthen earning power by optimizing refinery operations, reducing costs, and increasing work efficiency.
To realize a carbon-neutral society, we are actively working on businesses with potential to become future pillars of earnings, such as SAF, hydrogen, and synthetic fuels.

◆Elastomers, rechargeable battery materials, ENB, PIB, etc.
Manufacture and sale of high performance materials

Our products are used in a wide range of daily necessities in addition to materials for rechargable batteries that are mainly used in things like electric vehicles (EV) and the elastomer solution styrene-butadiene rubber (SSBR), which is used to make high performance tires. Factors like foreign exchange rates and economic trends impact our efforts toward global expansion of our businesses, but we are making efforts to maximize profits by strengthening our competitiveness in base businesses (high performance materials and general purpose products ), and increasing sales of SSBR and strategic products such as battery binders used in making rechargeable batteries.

◆Generation, procurement, and sale of electricity
◆City gas business and VPP business

We aim to expand sales and increase profits by creating a sales system that does not overly depend on procuring electric power solely from the market by utilizing our own domestic power sources such as our own in-house power generating equipment at refineries as well as highly-efficient and state-of-the-art natural gas power plants like Kawasaki Thermal Power Station and Goi Thermal Power Station, and providing various choices that meet customer needs.
In the VPP business, we are contributing to the stable supply of electricity through charging and discharging of our storage batteries, which are the largest in Japan.

◆Solar power, onshore and offshore wind power, biomass, etc.
Development, generation, and sale of renewable energy

Because of this, stockpiled inventory widely impacts net income when crude oil price rises or falls significantly. Since inventory valuation effects can fluctuate widely depending on external factors like crude oil price, "net income excluding inventory valuation effects" and "net operating profit excluding inventory valuation effects" which subtract the effects are important indicators for understanding the Group's actual earnings.

Let us look at the images below of real-life examples.

The price difference when there are valuations of "inventory at the beginning of fiscal year (gross average method)" and "no inventory at beginning of fiscal year" are calculated as inventory valuation effects.

◆Exploration, production, and sale of oil and natural gas
◆Conducting environmentally conscious businesses focusing on CCS and CCUS

We are engaged in the exploration and production of oil and natrual gas around the world. Impact of factors such as resource prices and fluctuating exchange rates on net income are listed as "sensitivity" in financial statements.
In environmentally conscious businesses focusing on CCS and CCUS*, we will construct a value chain that leverages our strengths in the knowledge and technology we have cultivated in the Oil and Natural Gas E&P Business.

*CCS: technology for carbon dioxide capture and storage, CCUS: an advanced form of CCS, technology for carbon dioxide capture, storage, and utilization

◆Manufacture and sale of semiconductor materials and ICT materials
◆Development, refinement, and recycling of copper and rare metals

Driven by the increase of data centers due to the spread of AI and advancements in mobility technologies and communication devices, ENEOS has many products with the largest share in the world in semiconductor and ICT materials, which are expected to grow at a high rate.
We aim to realize profit growth that exceeds market growth by establishing a high-mix low-volume manufacturing system that has high profit margins.

*Began preparations for listing JX Metals Corporation to the Tokyo Stock Exchange in May 2023.

◆such as the Subsidiary NIPPO (asphalt pavement)