 Keiichiro Okabe (right) Chairman Cosmo Oil Co., Ltd. Yaichi Kimura (left) President Cosmo Oil Co., Ltd. |
The Cosmo Oil Group Mission
The Cosmo Oil Group's mission is to help accommodate the varied needs of society primarily through the supply of petroleum energy products. To this end, we will establish a strong, integrated framework for our core operations?from oil exploration and production to the refining and marketing of petroleum products and petrochemicals?in order to deliver stable energy supplies on a global level while ensuring harmony with the environment.
To achieve these objectives, it is essential for us to remain an organization capable of sustainable growth. We believe we must push ahead with CSR management, with the aim of building an operational base that is strong and flexible enough to withstand future changes in our business environment, while investing for growth and responding to the expectations of all stakeholders.
Review of FY2010
Great East Japan Earthquake: Impact and ResponsesImmediately after the Great East Japan Earthquake struck on March 11, 2011, LPG tanks at our Chiba Refinery caught fire (extinguished on March 21). We deeply regret the major anxiety caused to shareholders and other investors as a result of this event.
Although we managed to prevent the fire from spreading to refining equipment, a total of 17 LPG tanks were destroyed, incurring extraordinary losses of \5.7 billion. On June 30, 2011, meanwhile, we received notice of revocation of self-certification for the Chiba Refinery from the Nuclear and Industrial Safety Agency, Ministry of Economy, Trade and Industry, for the Chiba Refinery. This notice disallows the refinery from conducting legal inspections of its own equipment, and such inspections will now be done by Chiba Prefecture. We take very seriously the fact that a fire broke out at our refinery. Seeking to identify the cause of the fire and prevent a recurrence, therefore, we established an Accident Investigation Committee, which includes outside experts. Based on the findings of the Committee, we will devote our entire efforts to restoring the Chiba Refinery's operations.
Performance in FY2010In fiscal 2010, the Cosmo Oil Group made steady progress in streamlining operations while at the same time securing appropriate and stable margins in its petroleum business.
As a result, consolidated net sales increased \159.4 billion year on year, to \2,771.5 billion, and operating income jumped \69.9 billion, to \104.1 billion. Operating income excluding the impact of inventory valuation surged \100.2 billion, to \81.8 billion. Net income amounted to \28.9 billion, returning to positive territory for the first time in three years.
Fiscal 2011 Policies
The Great East Japan Earthquake has underscored the greater than ever importance of our responsibility to ensure stable supplies. To fulfill that responsibility, we must have a robust earnings base. In the current fiscal year, we will do our utmost to restore the Chiba Refinery, where operations have been suspended since the LPG tanks caught fire. At the same time, we will continue striving to secure optimal margins while making maximum use of the coker facilities at the Sakai Refinery completed in the previous year.
In the oil exploration and production and the petrochemical business segments, we will deploy our distinctive strengths to increase Group-wide output of crude oil and raise production of para-xylene and mixed xylene, in order to generate sustained profits.
Given that crude oil prices are expected to remain at a high level and domestic demand is declining, for FY2011 we forecast consolidated net sales of \2,920.0 billion (up \148.5 billion year on year), operating income of \90.0 billion (down \14.1 billion), and net income of \28.0 billion (down \0.9 billion).
