MIRA INFORM REPORT

 

 

Report Date :

20.08.2014

 

IDENTIFICATION DETAILS

 

Name :

IDEMITSU KOSAN CO LTD

 

 

Registered Office :

3-1-1 Marunouchi Chiyodaku Tokyo 100-8321

 

 

Country :

Japan

 

 

Financials (as on) :

31.03.2014

 

 

Date of Incorporation :

March 1940

 

 

Legal Form :

Limited Company

 

 

Line of Business :

Subject is engaged in Oil & petrochemical refinery.

 

 

No of Employees :

4,203

 

 

RATING & COMMENTS

 

MIRA’s Rating :

Ba

 

RATING

STATUS

PROPOSED CREDIT LINE

41-55

Ba

Overall operation is considered normal. Capable to meet normal commitments.

Satisfactory

 

 

Status :

Satisfactory

Payment Behaviour :

Slow but correct

Litigation :

Clear

 

NOTES :

Any query related to this report can be made on e-mail : infodept@mirainform.com while quoting report number, name and date.

 

 

ECGC Country Risk Classification List – June 01, 2014

 

Country Name

Previous Rating

(31.03.2014)

Current Rating

(01.06.2014)

Japan

A1

A1

 

Risk Category

ECGC Classification

Insignificant

 

A1

Low Risk

 

A2

Moderate Low Risk

 

B1

Moderate Risk

 

B2

Moderate High Risk

 

C1

High Risk

C2

Very High Risk

 

D

 

 

JAPAN - ECONOMIC OVERVIEW

 

In the years following World War II, government-industry cooperation, a strong work ethic, mastery of high technology, and a comparatively small defense allocation (1% of GDP) helped Japan develop a technologically advanced economy. Two notable characteristics of the post-war economy were the close interlocking structures of manufacturers, suppliers, and distributors, known as keiretsu, and the guarantee of lifetime employment for a substantial portion of the urban labor force. Both features are now eroding under the dual pressures of global competition and domestic demographic change. Japan's industrial sector is heavily dependent on imported raw materials and fuels. A small agricultural sector is highly subsidized and protected, with crop yields among the highest in the world. While self-sufficient in rice production, Japan imports about 60% of its food on a caloric basis. For three decades, overall real economic growth had been spectacular - a 10% average in the 1960s, a 5% average in the 1970s, and a 4% average in the 1980s. Growth slowed markedly in the 1990s, averaging just 1.7%, largely because of the after effects of inefficient investment and an asset price bubble in the late 1980s that required a protracted period of time for firms to reduce excess debt, capital, and labor. Modest economic growth continued after 2000, but the economy has fallen into recession three times since 2008. A sharp downturn in business investment and global demand for Japan's exports in late 2008 pushed Japan into recession. Government stimulus spending helped the economy recover in late 2009 and 2010, but the economy contracted again in 2011 as the massive 9.0 magnitude earthquake and the ensuing tsunami in March disrupted manufacturing. The economy has largely recovered in the two years since the disaster, but reconstruction in the Tohoku region has been uneven. Prime Minister Shinzo ABE has declared the economy his government's top priority; he has overturned his predecessor's plan to permanently close nuclear power plants and is pursuing an economic revitalization agenda of fiscal stimulus, monetary easing, and structural reform. Japan joined the Trans Pacific Partnership negotiations in 2013, a pact that would open Japan's economy to increased foreign competition and create new export opportunities for Japanese businesses. Measured on a purchasing power parity (PPP) basis that adjusts for price differences, Japan in 2013 stood as the fourth-largest economy in the world after second-place China, which surpassed Japan in 2001, and third-place India, which edged out Japan in 2012. The new government will continue a longstanding debate on restructuring the economy and reining in Japan's huge government debt, which is exceeding 230% of GDP. To help raise government revenue and reduce public debt, Japan decided in 2013 to gradually increase the consumption tax to a total of 10% by the year 2015. Japan is making progress on ending deflation due to a weaker yen and higher energy costs, but reliance on exports to drive growth and an aging, shrinking population pose other major long-term challenges for the economy.

 

Source : CIA

 

Company name & address

 

IDEMITSU KOSAN CO LTD

 

 

REGD NAME

 

Idemitsu Kosan KK

 

 

MAIN OFFICE

 

3-1-1 Marunouchi Chiyodaku Tokyo 100-8321 JAPAN

Tel: 03-3213-3115         

Fax: 03-3213-9354   

 

URL:                 http://www.idemitsu co.jp/

E-Mail address: (thru the URL)

 

ACTIVITIES:      Oil & petrochemical refinery

BRANCHES:     Sapporo, Sendai, Chiba, Yokohama, Nagoya, Osaka, other (Tot 29)

OVERSEAS:     USA (2), London, Singapore (3), China (3), Thailand, Malaysia (3), Germany,

                        Norway, other

REFINERIES:    Tomakomai (Hokkaido); Chiba; Chita (Aichi) Tokuyama

 

CHIEF EXEC:    TAKASHI TSUKIOKA, PRES

 

Yen Amount:     In million Yen, unless otherwise stated

 

 

SUMMARY

 

FINANCES        FAIR                                         A/SALES          Yen 5,034,995 M

PAYMENTS      SLOW BUT CORRECT   CAPITAL           Yen 108,606 M

TREND             STEADY                                   WORTH            Yen 743,786 M

STARTED         1940                                         EMPLOYES      4,203

 

COMMENT:       OIL & PETROCHEMICAL REFINERY. 

FINANCIAL SITUATION CONSIDERED FAIR AND GOOD FOR ORDINARY

BUSINESS ENGAGEMENTS.

 

 

 

 

 

 

Unit in Million Yen

Forecast (or estimated) figures for 31/03/2015 fiscal term

 

 

HIGHLIGHTS

 

The subject company was established originally in 1911 by Sazo Idemitsu at Moji as

Idemitsu Shokai, a sole proprietorship on his account, thence advanced into China & Manchuria.  In 1940 incorporated as Idemitsu Kosan KK, absorbing the said Idemitsu Shokai, and in 1947, when Oil Distribution Assoc started, resumed oil business in Japan.  This is leading oil refinery, independent of any of the Major Oil Companies, with petrochemical producing operations.  In 1953, amid the international disputes over Iran, the firm ventured to send tankers to Iran and imported crude oils from there, which made the firm conspicuous in the oil industry.  In Aug 2004, absorbed Idemitsu Petrochemical Co Ltd, wholly owned subsidiary founded 1964, by separating unprofitable operation units to Mitsui Chemical Corp.  In Nov 2005, upgraded Beijing Office to a wholly owned subsidiary, Idemitsu Energy Consulting (Beijing) Co Ltd.  The firm went public by listing on the Tokyo S/E on 24/10/2006.  This is a major oil refiner and distributor.  Has established reputation in petrochemicals and functional resins.  Based on last-in first-out policy, generating no profit or loss on crude oil inventories.  Also engaged in development of natural resources.  Fostering organic EL materials.  The company made a 33% investment in Petrogas Energy Corp, which is engaged in gas & crude oil storage and shipment in North America, in preparation for shale gas export.  Profitability of coal development business is improving through underground mining

 

 

FINANCIAL INFORMATION

 

The sales volume for Mar/2014 fiscal term amounted to Yen 5,043,995 million, a 15.1% up from Yen 4,374,696 million in the previous term.  Petrochemical sales grew faster than expected, led by styrene monomers.  The recurring profit was posted at Yen 81,921 million and the net profit at Yen 36,294 million, respectively, compared with Yen 109,122 million recurring profit and Yen 50,167 million net profit, respectively, a year ago. 

 

(Apr/Jun/2014 results): Sales Yen 1,186,321 million (up 7.2%), operating profit Yen 22,019 million (up 61.5%), recurring profit Yen 23,720 million (up 47.2%), net profit Yen 9,126 million (down 59.4%).  (% compared with the corresponding period a year ago).

           

For the current term ending Mar 2015 the recurring profit is projected at Yen 76,000 million and the net profit at Yen 30,000 million, respectively, on a 2.1% rise in turnover, to Yen 5,140,000 million.  Petroleum products business will enjoy a sharp rise in profit margin, helped by supply capacity reduction in the industry.  Petrochemicals and oil resource development businesses will suffer a reactionary sales drop.  But deficit in coal operations will shrink thanks to streamlining efforts.     

           

The financial situation is considered FAIR and goof for ORDINARY business engagements. 

 

 

REGISTRATION

 

Date Registered:  Mar 1940

Legal Status:        Limited Company (Kabushiki Kaisha)

Authorized:           436 million shares

Issued:                 160,000,000 shares

Sum:                   Yen 108,606 million

           

Major shareholders (%): Nissho Kosan Co (16.9), Idemitsu Culture & Welfare Fund (7.7), Idemitsu Museum of Arts (5.0), Employees’ S/Holding Assn (4.1), MUFG (3.2), SMBC (3.2), Japan Trustee Services T (2.8), Master Trust Bank of Japan T (1.6), Masakazu Idemitsu (1.5); foreign owners (19.3)

 

No. of shareholders: 1,176

 

Listed on the S/Exchange (s) of: Tokyo

 

Managements: Kazuhisa Nakano, ch; Takashi Tsukioka, pres; Yoshihisa Matsumoto, v pres; Daisuke Seki, v pres; Yasunori Maeda, mgn dir; Hiroshi Seki, mgn dir; Katsumi Saito, mgn dir; Takashi Matsushita, mgn dir; Shun’ichi Kito, mgn dir; Eri Yokota, dir; Ryosuke Ito, dir

Nothing detrimental is known as to the commercial morality of executives.

 

Related companies: Idemitsu Oil & Gas Exploration, Idemitsu tanker, Idemitsu Engineering, Idemitsu Gas & Life, Apollo Service, other

 

 

OPERATION

 

Activities: Oil & petrochemical refinery.

 

(Sales breakdown by divisions):

Oil refining & products (82%): gasoline, naphtha, kerosene, gas oil, heavy fuel oil, jet fuel, lube oil, LPG, marine supply bunker oils, others;

Petrochemicals (13%): ethylene, benzene, butadiene, their derivatives, others;

Oil development, Resources (43%): research, drilling, development of oil resources;

Others (1%): auto-related products, leasing, credit card business, construction & maintenance of refineries & other buildings.

Overseas Sales Ratio (19%)

 

Clients: [Mfrs, wholesalers] Zen-Noh, Mitsui & Co, Mitsubishi Corp, Tokuyama Corp,

Tosoh Corp, ANA, Nippon Zeon, Sumitomo Chemical, Usami & Co, Prime Polymer,

Futamura Chemical, other

No. of accounts: 1000

Domestic areas of activities: Nationwide

Suppliers: [Oil producers, wholesalers] Crude oils are supplied from Saudi Arabia, Kuwait, Qatar, Abu Dhabi, China, Iran, Indonesia, other. 

Domestically: JX Nippon Oil & Energy Corp, Arabian Oil Co, INPEX Corp, other

.

Payment record: Slow but correct

 

Location: Business area in Tokyo.  Office premises at the caption address are leased and maintained satisfactorily.

 

Bank References:

MUFG (H/O)

SMBC (Tokyo)

Relations: Satisfactory

 

 

FINANCES

 

 (In Million Yen)

FINANCES: (Consolidated in million yen)

　

　

　

Terms Ending:

31/03/2014

31/03/2013

INCOME STATEMENT

 

　

　

  Annual Sales

　

5,034,995

4,374,696

　

  Cost of Sales

4,684,470

4,005,652

　

      GROSS PROFIT

350,524

369,044

　

  Selling & Adm Costs

272,326

258,359

　

      OPERATING PROFIT

78,197

110,684

　

  Non-Operating P/L

3,724

-1,562

　

      RECURRING PROFIT

81,921

109,122

　

      NET PROFIT

36,294

50,167

BALANCE SHEET

 

 

　

　

  Cash

　

161,522

116,847

　

  Receivables

 

418,883

425,920

　

  Inventory

 

717,368

646,448

　

  Securities, Marketable

　

　

　

  Other Current Assets

124,696

122,001

　

      TOTAL CURRENT ASSETS

1,422,469

1,311,216

　

  Property & Equipment

1,087,611

1,030,335

　

  Intangibles

 

54,327

52,047

　

  Investments, Other Fixed Assets

430,656

334,882

　

      TOTAL ASSETS

2,995,063

2,728,480

　

  Payables

 

438,594

405,307

　

  Short-Term Bank Loans

434,476

349,196

　

　

 

　

　

　

  Other Current Liabs

428,969

429,646

　

      TOTAL CURRENT LIABS

1,302,039

1,184,149

　

  Debentures

 

45,000

20,000

　

  Long-Term Bank Loans

539,546

493,875

　

  Reserve for Retirement Allw

13,071

15,948

　

  Other Debts

　

351,620

326,560

　

      TOTAL LIABILITIES

2,251,276

2,040,532

　

      MINORITY INTERESTS

 

　

　

Common stock

108,606

108,606

　

Additional paid-in capital

71,131

71,131

　

Retained earnings

359,934

331,529

　

Evaluation p/l on investments/securities

4,523

3,818

　

Others

 

199,722

172,982

　

Treasury stock, at cost

(130)

(118)

　

      TOTAL S/HOLDERS` EQUITY

743,786

687,948

　

      TOTAL EQUITIES

2,995,063

2,728,480

CONSOLIDATED CASH FLOWS

 

　

　

 

Terms ending:

31/03/2014

31/03/2013

　

Cash Flows from Operating Activities

　

50,087

50,780

　

Cash Flows from Investment Activities

-179,811

-70,891

　

Cash Flows from Financing Activities

161,143

-45,657

　

Cash, Bank Deposits at the Term End

　

159,991

116,446

ANALYTICAL RATIOS            Terms ending:

31/03/2014

31/03/2013

　

 

Net Worth (S/Holders' Equity)

743,786

687,948

　

 

Current Ratio (%)

109.25

110.73

　

 

Net Worth Ratio (%)

24.83

25.21

　

 

Recurring Profit Ratio (%)

1.63

2.49

　

 

Net Profit Ratio (%)

0.72

1.15

　

　

Return On Equity (%)

4.88

7.29

 

 

 

FOREIGN EXCHANGE RATES

 

Currency
Unit

Indian Rupees

US Dollar

1

Rs.60.73

UK Pound

1

Rs.101.47

Euro

1

Rs.81.04

 

INFORMATION DETAILS

 

Analysis Done by :

RAS

 

 

Report Prepared by :

TPT

 

RATING EXPLANATIONS

 

RATING

STATUS

 

 

PROPOSED CREDIT LINE

>86

Aaa

Possesses an extremely sound financial base with the strongest capability for timely payment of interest and principal sums

 

Unlimited

71-85

Aa

Possesses adequate working capital. No caution needed for credit transaction. It has above average (strong) capability for payment of interest and principal sums

 

Large

56-70

A

Financial & operational base are regarded healthy. General unfavourable factors will not cause fatal effect. Satisfactory capability for payment of interest and principal sums

 

Fairly Large

41-55

Ba

Overall operation is considered normal. Capable to meet normal commitments.

 

Satisfactory

26-40

B

Capability to overcome financial difficulties seems comparatively below average.

 

Small

11-25

Ca

Adverse factors are apparent. Repayment of interest and principal sums in default or expected to be in default upon maturity

 

Limited with full security

<10

C

Absolute credit risk exists. Caution needed to be exercised

 

 

Credit not recommended

--

NB

                                       New Business

 

--

 

This score serves as a reference to assess SC’s credit risk and to set the amount of credit to be extended. It is calculated from a composite of weighted scores obtained from each of the major sections of this report. The assessed factors and their relative weights (as indicated through %) are as follows:

 

Financial condition (40%)            Ownership background (20%)                 Payment record (10%)

Credit history (10%)                    Market trend (10%)                                Operational size (10%)

PRIVATE & CONFIDENTIAL : This information is provided to you at your request, you having employed MIPL for such purpose. You will use the information as aid only in determining the propriety of giving credit and generally as an aid to your business and for no other purpose. You will hold the information in strict confidence, and shall not reveal it or make it known to the subject persons, firms or corporations or to any other. MIPL does not warrant the correctness of the information as you hold it free of any liability whatsoever. You will be liable to and indemnify MIPL for any loss, damage or expense, occasioned by your breach or non observance of any one, or more of these conditions

This report is issued at your request without any risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL) or its officials.