According to the company’s website press release on May 10, 2023, in the third quarter ended September 30, 2022, the tentative accounting treatment of the business combinations was finalized, and in the comparative analysis with the three months ended March 31, 2022, the figures reflect the significant revision of the initial allocation of acquisition costs due to the finalization of the tentative accounting treatment. Please refer to “2. Consolidated Financial Statements and Principal Notes (3) Notes to Consolidated Financial Statements (Business Combinations)” for further information.
In addition, the changes in accounting policies have been made from the first quarter ended March 31, 2023, and the figures after retrospective application are used in the comparative analysis with the three months ended March 31, 2022 and the year ended December 31, 2022. Please refer to “2. Consolidated Financial Statements and Principal Notes (3) Notes to Consolidated Financial Statements (Changes in Accounting Policies)” for further information.
Furthermore, the change in reportable segments has been made from the first quarter ended March 31, 2023, and the figures reflect the revision of the method of calculation for a portion of the sales volume and average sales price in the comparative analysis with the three months ended March 31, 2022.
Explanation on Consolidated Financial Results
Net sales for the three months ended March 31, 2023 increased by ¥93.0 billion, or 19.2%, to ¥578.4 billion from the corresponding period of the previous fiscal year due to the depreciation in the average exchange rate of the Japanese yen against the U.S. dollar during the period. Net sales of crude oil increased by ¥44.1 billion, or 12.4%, to ¥399.6 billion, and net sales of natural gas increased by ¥49.8 billion, or 40.2%, to ¥173.7 billion. Sales volume of crude oil increased by 1,502 thousand barrels, or 4.3%, to 36,677 thousand barrels, and sales volume of natural gas increased by 2,456 million cf, or 2.0%, to 128,241 million cf. Sales volume of overseas natural gas increased by 8,932 million cf, or 9.6%, to 102,132 million cf, and sales volume of domestic natural gas decreased by 173 million m3, or 19.9%, to 697 million m3 (26,011 million cf). The average sales price of overseas crude oil decreased by US$4.72, or 5.4%, to US$82.20 per barrel. The average sales price of overseas natural gas increased by US$0.67, or 11.1%, to US$6.73 per thousand cf, and the average sales price of domestic natural gas increased by ¥44.91, or 68.3%, to ¥110.67 per m3. The average exchange rate of the Japanese yen against the U.S. dollar on consolidated net sales depreciated by ¥16.57, or 14.3%, to ¥132.60 per U.S. dollar.
The increase of ¥93.0 billion in net sales was mainly derived from the following factors: regarding net sales of crude oil and natural gas, an increase in sales volume contributing ¥22.8 billion to the increase, an increase in unit sales price contributing ¥8.2 billion to the increase, the depreciation in the average exchange rate of the Japanese yen against the U.S. dollar contributing ¥62.9 billion to the increase, and a decrease in net sales excluding crude oil and natural gas of ¥0.9 billion.
Meanwhile, cost of sales increased by ¥10.2 billion, or 4.5%, to ¥235.5 billion. Exploration expenses decreased by ¥0.4 billion, or 7.5%, to ¥5.9 billion. Selling, general and administrative expenses increased by ¥5.4 billion, or 21.8%, to ¥30.5 billion. As a result, operating income increased by ¥77.8 billion, or 34.1%, to ¥306.3 billion.
Other income increased by ¥17.9 billion, or 29.4%, to ¥78.8 billion due to an increase in equity in earnings of affiliates and others. Other expenses increased by ¥5.8 billion, or 51.4%, to ¥17.1 billion. As a result, ordinary income increased by ¥89.9 billion, or 32.4%, to ¥367.9 billion.
Income taxes increased by ¥32.4 billion, or 17.6%, to ¥216.8 billion, and net loss attributable to non-controlling interests was ¥0.3 billion. As a result of the above effects, net income attributable to owners of parent increased by ¥57.5 billion, or 61.2%, to ¥151.4 billion.
