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Supporting Material forSecond Quarter Results 2012
Showa Shell Sekiyu K.K.1
31 July 2012
Showa Shell Sekiyu K.K.
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This document contains forward-looking statements concerning the
results of operations and businesses of Showa Shell Sekiyu K.K..
Forward-looking statements are statements of future expectations that are
Notes
Showa Shell Sekiyu K.K.2
based on management’s current expectations and assumptions and
involve known and unknown risks and uncertainties that could cause
actual results, performance or events to differ materially from those
expressed or implied in these statements.
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Highlights of Financial Results, Jan-Jun 2012
Crude Oil Price & Exchange Rate2011 2011 Results 2012 Results
Results an - Jun an - Jun
Dubai crude oil price (USD/bbl) 106.3 105.8 111.3
(\/USD) 79.8 82.0 79.8
(\/EUR) 111.1 115.0 103.5
Exchange Rate
Highlights of Financial Results2011 Results 2012 Results
Jan - Jun Jan - JunChanges vs. 2011 (%)(million yen)
Showa Shell Sekiyu K.K.3
a es , , , , - , - .
Operating income 67,642 -10,875 -78,517 -
Non-Operating income 1,176 -1,626 -2,803 -
Ordinary income 68,818 -12,501 -81,320 -
※Inventory valuation 38,491 -6,287 -44,779 -※CCS ordinary income 30,326 -6,214 -36,540 -
Extraordinary income 2,800 1,109 -1,691 -60.4%
Net income 37,244 -12,590 -49,835 -
【【【【Notes】】】】CCS ordinary income((((ordinary income on Current Cost of Supply basis))))
::::Ordinary income based on the cost excluding inventory valuation effects.
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Oil Energy Solution
Business Business
Sales 1,276,871 29,416 4,599 - 1,310,887
Operating Income 470 -12,041 722 -25 -10,875
(million yen) Others Consolidated Adjustment
Jan-Jun 2012
Jan-Jun 2011
Information by Business Segment, Jan-Jun 2012
Showa Shell Sekiyu K.K.4
nergy o u on
Business Business
Sales 1,355,252 20,913 4,769 - 1,380,935
Operating Income 77,572 -10,811 888 -8 67,642
(million yen) Others Consolidated Adjustment
・Oil Business: manufacturing and sales of oil products, such as gasoline, naphtha, kerosene, diesel oil, fuel oil, lubricants, LPG, bitumen,and chemicals
・Energy Solution Business: manufacturing and sales of solar cell modules and electricity
・Others: Leasing and administration of properties, construction works, sale and lease of auto accessories, etc.
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Key Points of Financial Results (Jan-Jun) Consolidated sales during this six-month period (Jan-Jun) in 2012 amounted to 1,310.8
billion yen (5.1% down vs. Jan-Jun 2011) and ordinary income was ▲12.5 billion yen(down by 81.3 billion yen vs. Jan-Jun 2011). Consolidated CCS ordinary income,
excluding inventory valuation impact, was▲6.2 billion yen (down by 36.5 billion yen vs. Jan-Jun 2011)
Oil Business
✔Sales was 1,276.8 billion yen (5.8% down vs Jan-Jun 2011) and operating incomemarked 0.4 billion en (down b 77.1billion en).
Showa Shell Sekiyu K.K.5
✔Compared with Jan-Jun 2011, overall oil product margins decreased and CCS operatingincome of the oil business was down from Jan-Jun 2011.
Energy Solution Business
✔
Sales was 29.4 billion yen (40.7% up vs Jan-Jun 2011) and operating income markedthe deficit of ▲12 billion yen (down by 1.2 billion yen).
✔ As to Solar Business, a major part of Energy Solution Business, business expansion and
cost reduction have progressed. The business still bore the operating loss resulted from
ongoing fierce market competition, the performance, however, improved from theprevious quarter.
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Business Overview (2Q, Apr-Jun)
Oil Business✔Total domestic sales volume declined year on year. This is mainly because the previous year’s
figures contained emergent supply after the Great East Japan Earthquake in 2Q 2011. Without the emergent supply, sales volume in 2Q 2012 is as good as 2Q 2011. Export volume
decreased due to the closure of Ohgimachi Factory in September 2011.✔Oil product margins decreased year on year, as it was difficult to reflect crude oil costs to the
product sales prices when the crude oil prices and product prices sharply fell at the same time.
✔Tem orar costs caused b technical litch at some rou refineries ushed the rofit down.
Showa Shell Sekiyu K.K.6
Energy Solution Business (Solar Business)
✔In the Third Miyazaki Plant(Kunitomi Plant), the flagship factory, maintenance to improve itsperformance was conducted in response to the sharply rising domestic demand in 2H.
✔Cost reductions for parts/materials procurement, etc. were continuously implemented.
✔Module sales expanded in both domestic and overseas year on year, but some initially plannedsales are slipped into 3Q or 4Q since the Feed-in Tariff Scheme for Renewable Energy wasresolved far behind schedule. Demand hike is largely expected.
✔Module prices were still in declining trend, but the pace slowed down compared with 2011.
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Ordinary Profit 2011/Jan-Jun vs. 2012/Jan-Jun
(Unit: Billion Yen)
30.368.8
+38.5
WAV *CCS
▲▲▲▲35.4
**Stock Effect etc. Oil
Business
▲▲▲▲36.5
Ordinary profit ▲▲▲▲81.3
Showa Shell Sekiyu K.K.7
2011 2012* CCS: Current Cost of Supply
** Including the effect of Lower of cost or market value method
▲▲▲▲6.2
+0.7▲▲▲▲0.1 ▲▲▲▲2.8
WAV *CCS▲▲▲▲1.2
+2.3
▲▲▲▲6.3
▲▲▲▲12.5
Refinery cost
and M&A
OilBusiness
Subsidiaries
Energy SolutionBusiness
Othersetc. Non-ope.
**Stock Effect etc.
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Crude oil refined and Sales volume
2011 2011Results 2012ResultsResults Jan-Jun Jan-Jun
Crude oil refined (thousand KL ) 26,212 13,810 10,342
Refinery utilization rate (%) 93.2% 93.2% 90.5%
2011 Results Jan-Jun Jan-Jun
vs. 2011 (%) (thousand KL ) 2012 Results
Crude oil refined & Utilization rate
Sales volume by products
Showa Shell Sekiyu K.K.8
n , , - .
Jet Fuel 1,000 1,103 + 10.3%
Kerosines 1,669 1,537 - 7.9%
Diesel Oil 2,490 2,391 - 4.0%
Fuel Oil A 854 842 - 1.5%
Fuel Oil C 806 971 + 20.4%
Others 2,139 1,989 - 7.0%
Export 1,888 261 - 86.2%
Total 15,361 13,360 - 13.0%
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Forecast full year results for 2012
Forecast of consolidated full year results 2012
2011Results Announced in Feb Announced in Jul
Dubai crude oil pr ($/B) 106.3 110 108 -2
( Yen/$) 79.8 77 80 3
( Yen/EUR) 111.1 100 102 2Exchange rate
Changes2012
Crude oil price & Exchange rate
Showa Shell Sekiyu K.K.9
2011Results Announced in Feb Announced in Jul
Net sales 2,771,418 2,630,000 2,620,000 -10,000
Operating income 60,288 31,000 8,000 -23,000
Ordinary income 61,807 30,000 5,000 -25,000
※Inventory valuation 31,787 0 -5,000 -5,000
※CCS ordinary income 30,020 30,000 10,000 -20,000
Net income 23,110 11,000 -4,000 -15,000
million yen Changes2012
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Showa Shell Sekiyu K.K.10
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13.7
7.8
18.7
39.2
29.5
14.1
7.2
12.7 10.4
18.8
11.5
20
30
40
50
Ordinary Income
CCS Ordinary Income
Quarterly trend of Ordinary income
Billion yen
Showa Shell Sekiyu K.K.
1.8
-3.4 -3.5
-26.6
3.87.1
-7.4
4.1
-10.3
-30
-20
-10
0
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q
2010 2011 201211
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Highlights of Financial Results, Apr-Jun 2012
Crude Oil Price & Exchange Rate 2011 2011 Results 2012 ResultsResults Apr - Jun Apr - Jun
Dubai crude oil price (USD/bbl) 106.3 110.6 106.2
(\/USD) 79.8 81.7 80.2
(\/EUR) 111.1 117.4 102.8
Exchange Rate
Highlights of Financial Results2011 Results 2012 Results
Apr - Jun Apr - JunChanges vs. 2011 (%)(million yen)
Showa Shell Sekiyu K.K.12
a es , , - , - .
Operating income 28,772 -25,032 -53,804
Non-Operating income 789 -1,652 -2,442
Ordinary income 29,561 -26,685 -56,247
※
Inventory valuation 18,052 -16,320 -34,372※CCS ordinary income 11,509 -10,365 -21,874
Extraordinary income 1,282 288 -994 -77.5%
Net income 16,771 -18,881 -35,652
【【【【Notes】】】】CCS ordinary income((((ordinary income on Current Cost of Supply basis))))::::Ordinary income based on the cost excluding inventory valuation effects.
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Oil Energy Solution
Business Business
Sales 592,054 15,671 2,436 - 610,162
Operating Income -20,706 -4,648 334 -12 -25,032
(million yen) Others Consolidated Adjustment
Apr-Jun 2012
Apr-Jun 2011
Information by Business Segment, Apr-Jun 2012
Showa Shell Sekiyu K.K.13
nergy o u on
Business Business
Sales 676,075 11,425 2,187 - 689,689
Operating Income 33,679 -5,193 293 -7 28,772
(million yen) Others Consolidated Adjustment
・Oil Business: manufacturing and sales of oil products, such as gasoline, naphtha, kerosene, diesel oil, fuel oil, lubricants, LPG, bitumen,and chemicals
・Energy Solution Business: manufacturing and sales of solar cell modules and electricity
・Others: Leasing and administration of properties, construction works, sale and lease of auto accessories, etc.
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Crude oil refined and Sales volume
2011 2011Results 2012ResultsResults Apr-Jun Apr-Jun
Crude oil refined (thousand KL ) 26,212 6,625 4,657
Refinery utilization rate (%) 93.2% 88.9% 81.5%
2011 Results Apr-Jun Apr-Jun
vs. 2011 (%) (thousand KL ) 2012 Results
Crude oil refined & Utilization rate
Sales volume by products
Showa Shell Sekiyu K.K.14
n , , - .
Jet Fuel 521 569 + 9.0%
Kerosines 401 312 - 22.3%
Diesel Oil 1,263 1,176 - 6.9%
Fuel Oil A 342 310 - 9.3%
Fuel Oil C 450 488 + 8.5%
Others 1,012 876 - 13.4%
Export 935 51 - 94.6%
Total 7,194 5,891 - 18.1%
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(USD/bbl)
Crude oil price (Platt’s Dubai)
84.4
100.9110.6
107.1 106.5
116.5
106.2
90
100
110
120
130
Showa Shell Sekiyu K.K.15
76.0.
73.9
30
40
50
60
70
80
1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6
2010 Average78.1 USD/bbl
2012 1H Average111.3 USD/bbl
2011 Average106.3 USD/bbl
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(JPY/USD)
Exchange rates (JPY/USD TTM)
90.7
92.0
85.9
90
95
100
2012 1H Average79.8 JPY/USD
Showa Shell Sekiyu K.K.16
82.7 82.381.7
77.977.4
79.4
80.2
70
75
80
85
1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6
2010 Average87.8 JPY/USD
2011 Average79.8 JPY/USD
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(JPY/EUR)
Exchange rates (JPY/EUR TTM)
125.5
117.0 117.4120
125
130
135
140
2012 1H Average103.5 JPY/EUR
Showa Shell Sekiyu K.K.17
110.7 112.2112.7
110.2
104.3 104.1102.8
90
95
100
105
110
115
1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6
2010 Average116.3 JPY/EUR
2011 Average111.1 JPY/EUR
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25
30
35
40
60
80
100
国内国内国内国内マーケットのマーケットのマーケットのマーケットの状況状況状況状況①①①①((((ガソリンガソリンガソリンガソリン))))
Regular-Gasoline (Domestic Spot Price)
Crude & Product price ¥¥¥¥/L Spread¥¥¥¥/L
2010 2011 2012
Domestic Market (1) : Regular Gasoline
Showa Shell Sekiyu K.K.
9.212.2 13.0 12.3
12.8
11.013.5
10.5
11.6
7.3
0
5
10
15
20
0
20
40
1 2 3 4 5 6 7 8 9 101112 1 2 3 4 5 6 7 8 9 101112 1 2 3 4 5 618
Crude JCC
Spread ((((Spot price-CIF))))
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25
30
35
40
60
80
100
Domestic Market (2) : Diesel Oil
Spread¥¥¥¥/L
2010 2011
Diesel-Oil (Domestic Spot Price)
2012
Crude & Product price ¥¥¥¥/L
Showa Shell Sekiyu K.K.
9.611.3
13.913.4
15.413.0
10.8 11.012.9
8.5
0
5
10
15
20
0
20
40
1 2 3 4 5 6 7 8 9 101112 1 2 3 4 5 6 7 8 9 101112 1 2 3 4 5 619
Crude JCC
Spread ((((Spot price-CIF))))
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18.219.5
17.6 17.816.4
20
30
100
150
Global Market (1) : Diesel Oil
$/bbl Spread$$$$/ bbl
Diesel-Oil (Asian Spot Price)
2011
Dubai
20122010
Showa Shell Sekiyu K.K.
8.9
11.312.4 13.0
0
10
0
50
1 2 3 4 5 6 7 8 9 101112 1 2 3 4 5 6 7 8 9101112 1 2 3 4 5 620
Spread ((((Spot price – Dubai))))
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522 600
700
800
900
1000
900
1200
1500
Global Market (2) : Mixed Xylene
2010$/MT Spread$/MT
2011
Mixed Xylene (Asian Spot Price)
2012
Dubai
Showa Shell Sekiyu K.K.
356
288 271
401359
427 444
498
382
0
100
200
300
400
500
0
300
600
1 2 3 4 5 6 7 8 9 101112 1 2 3 4 5 6 7 8 9 101112 1 2 3 4 5 621
Spread ((((Spot price – Dubai))))
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2Q 2012 -Topics-Showa Shell signed MOU for new paraxylene(PX) project with GS Caltex and Taiyo Oil 【【【【 Apr】】】】
The three companies agreed to cooperate in materializing the new PX project for capacity increase of an annual production from 1.35 million ton to 2.35 million ton at PX plant of GS Caltex in Korea. By completion of this capacity addition, this plant becomes the world’s largest plant at a single site. PX isa basic raw material of polyester, and the demand is expected to further rise in Asia, especially inChina and India. Through this cooperation, we aim to enhance our competitiveness in oil business.
Solar Frontier supplied CIS thin-film panels to overseas solar power plant 【【【【 Apr-May 】】】】◇Solar Frontier supplied 3.8 MW of CIS thin-film solar panels to the Mill Creek Solar Farm of Public
Service Electric and Gas Company in Burlington County, New Jersey.◇Solar Frontier supplied 28.8 MW of CIS thin-film solar panels to solar power
Showa Shell Sekiyu K.K.
CIS thin-film solar panels are set to be installed on roofs of Lawson convenience-stores 【【【【 Jun】】】】
Lawson Inc. announced to install solar power generation systems on the 2,000 rooftops of its conveniencestores. Solar Frontier was selected as one of the suppliers. 22
Solar Power Plant of Belectric
p ant o , t e wor s ea ng so ar system ntegrator. o ar ront er
and BELECTRIC strengthened business relationship in the development,construction, and marketing of solar power generation systems, through thecreation of a new joint venture company, PV CIStems GmbH.
◇Showa Shell Group participated in the joint project of introducing solar power generation system tothe refinery-related facilities by TAKREER (Abu Dhabi national oil refining company), and Japan
Cooperation Center, Petroleum. Solar Frontier supplied CIS thin-film solar panel.◇Solar Frontier supplied CIS thin-film solar panels to the solar power plant of 1.5MW in Arizona
through leading Arizona electric service provider, Wilson Electric.
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Showa Shell Sekiyu K.K.