Nippon Oil Ups Profit, Sales Estimates on Crude Surge

Tokyo, Aug. 2 (Jiji Press)–Nippon Oil Corp. on Tuesday sharply lifted its profit and sales forecasts for the current fiscal year, as surging crude oil prices are seen pushing up the value of oil inventory and driving down sales costs.

The largest Japanese oil distributor raised its group net profit estimate for the year ending next March to 100 billion yen from 88 billion yen and sales projection to 5.4 trillion yen from 4.99 trillion yen.

The company newly assumes that U.S. light, sweet crude oil prices will average 50.8 dollars per barrel for the year, up from 46.2 dollars as earlier forecast, resulting in an additional gain of 33 billion yen in valuation profit on its oil inventory.

On top of the favorable impact of higher crude oil prices, the company’s bottom line is expected to be lifted by a planned increase in the number of consolidated units in its oil and natural gas development division, the company said.

Senior Vice President Shigeo Hirai predicted that crude oil prices are likely to retain their strength for the time being, but are seen easing off in the second half.

Nippon Oil also revised up its earnings estimates for the April- September first half, newly expecting to log a net profit of 74 billion yen, up sharply from 34 billion yen as earlier forecast, and sales of 2.63 trillion yen, up from 2.36 trillion yen. Its recurring profit estimate was lifted to 134 billion yen from 57 billion yen.

In April-June, the company’s net profit soared 63.0 pct from a year before to 39,930 million yen, while sales grew 19.4 pct to 1,237,828 million yen, it said.[EARNINGS]END