Cosmo Oil : 次のリンクは新しいウィンドウを開きますOverview of Business Results for 3rd Quarter of FY2015

Overview of business results for the 3rd Quarter of FY2015

Overview of Business Results for the Third Quarter of Fiscal Year Ending March 2016 [Based on Japanese GAAP] (Consolidated)

February 9, 2016

Name of the Company： Cosmo Energy Holdings Co., Ltd. Shares traded：TSE Company Code： 5021 URL http://ceh.cosmo-oil.co.jp/

Name of Representative： Keizo Morikawa (Title) President

(Title) General Manager of Corporate Communication Dept.

Name of Person to contact： Seiko Takagi

Group Corporate Planning Unit

Phone：[phone]

Scheduled date to file quarterly report： February 9, 2016 Dividend payment is to be started on： ― Availability of the Quarterly Financial Result Supplementary Information： Yes

Execution of the Quarterly Financial Result Presentation Meeting： Yes (for analysts and institutional investors)

Note：Figures less than 1 million are rounded down.

1. Consolidated Financial Results for the Third Quarter of Fiscal Year Ending March 2016 (For the period from April 1, 2015 to December 31, 2015)

2. Consolidated operating results (cumulative total) (Figures in % refer to changes from the same quarter a year earlier)

   
   

   Net sales		Operating income		Ordinary income		Net income for the third quarter
   million yen 1,731,461 -	% - -	million yen -19,606 -	% - -	million yen -26,985 -	% - -	million yen -48,600 -	% - -

   Third Quarter , FY2015 Third Quarter , FY2014

   Note：Comprehensive income Third Quarter, FY2015：-46,741 million yen (－%) Third Quarter, FY2014：- million yen (－%)

   
   

   Net income per share for the third quarter

   Diluted net income per share for the third quarter

   yen sen yen sen

   Third Quarter , FY2015 -574.70 -

   Third Quarter , FY2014 - -

   Note：Because the Company was incorporated through a sole-share transfer on October 1, 2015, there are no results of the same period of the previous fiscal year.

   
   

3. Consolidated Financial Position




Total assets Net assets Net Worth ratio




million yen million yen %

Third Quarter , FY2015 1,372,050 157,804 8.5

FY2014 - - -

[Reference] Net worth Third Quarter, FY2015：116,893 million yen FY2014：- million yen

Note：Because the Company was incorporated through a sole-share transfer on October 1, 2015, there are no results of the same period of the previous fiscal year.




4. Dividend Payment Results and Outlook

   
   

   Annual dividend per share total

   
   

   As of Q1-end As of Q2-end As of Q3-end As of Fiscal Year-end Full Year

   
   

   yen sen - -	yen sen - -	yen sen - -	yen sen -	yen sen -
   40.00	40.00

   FY2014 FY2015

   FY2015 (outlook)

   Note： 1. Revision made in the forecast dividend as of the end of the current quarter from the previous announcement： No

5. Because the Company was incorporated through a sole-share transfer on October 1, 2015, there are no results of theprevious fiscal year or the first and second quarters of the fiscal year under review.

   
   

6. Consolidated Business Outlook for FY2015 (April 1, 2015 to March 31, 2016)




(% indicates change from the corresponding period of FY 2014)




Net sales Operating income Ordinary income Net income Net income per share




million yen	%	million yen	%	million yen	%	million yen	%	yen sen
FY2015	2,262,000	-25.5	-19.500	-	-29.500	-	-27,000	-	-319.75

Note：Change made in figures of the consolidated business outlook as of the end of the current quarter from the previous announcement： Yes

Notes to Consolidated Financial Statements

1. Change in significant subsidiaries during the third quarter ： Yes

   Newly ― (Name of Company) ― Exception 1 (Name of Company) GYXIS CORPORATION (Cosmo Petroleum Gas Co., Ltd changed its corporate name to GYXIS CORPORATION on April 1, 2015)

   
   

2. Adoption of accounting method uniquely adopted to prepare consolidated financial statements for the current quarter： Yes

   
   

3. Changes in Accounting Policies, Accounting Estimates and Restatements：

4. Changes in accounting policies due to revisions of accounting standards, etc.： Yes

5. Changes in accounting policies for reasons other than the Item 1： No

6. Changes in accounting estimates： No

7. Restatements： No

   
   

8. Total Number of Outstanding Shares (Ordinary shares)

9. Number of outstanding shares as of the end of the period (including treasury shares)

10. Number of treasury shares as of the end of the period

11. Average Number of shares outstanding during the period (or the cumulative consolidated accounting period as of the end of the current quarter)




Third Quarter, FY2015 747,757 shares	FY2014	-	shares
Third Quarter, FY2015 84,567,367 shares	Third Quarter, FY2014	-	shares

Third Quarter, FY2015 84,770,508 shares FY2014 - shares

Note：The number of outstanding shares is calculated on the assumption that the share transfer was conducted at the beginning of the fiscal year 2015 (April 1,

2015) as Company conducted a sole share transfer by delivering 0.1 share of our common stock for each share of common stock of Cosmo Oil Co., Ltd. on October 1, 2015.




Note：Information about quarterly review procedure execution：

This release on the overview of quarterly business results is outside the scope of the quarterly report review procedures under the Financial Instruments and Exchange Act in Japan but as of the day of the disclosure of this release, the quarterly report review procedures under the Financial Instruments and Exchange Act have been completed.




Note：Request for appropriate use of the business outlook and other special remarks：

The consolidated business outlook, etc. for the full year of FY2015 is updated from the previous announcement made on November 5, 2015.

It is based on information available as of the published date of this release and actual results may materially differ from the forecast subject to variable factors that may arise in the future.

As for details, please refer to the "(3) Explanation Concerning Information regarding Consolidated Business Outlook" of the "1.Qualitative information about results for and at the end of the current quarter" on Page 2 of the Supporting data.

Supplementary information will be uploaded on the Cosmo Energy Holdings Co., Ltd. website on February 9, 2016.




(Related points of note)

1. The quarterly consolidated financial statements for the nine months ended December 31, 2015 (April 1, 2015 to December 31, 2015) have been prepared by inheriting the quarterly consolidated financial statements of Cosmo Oil Co., Ltd., which became a wholly owned subsidiary through a sole-share transfer.

2. Although the quarterly accounting period under review (October 1, 2015 to December 31, 2015) is the first quarterly accounting period since the Company was incorporated, the period is stated as the third quarter.

Contents of Supporting data




1. Qualitative information about results for and at the end of the current quarter

   
   

   Page

2. Explanation Concerning Information regarding Consolidated Operating Results ………………………………………… 2

3. Explanation Concerning Information regarding Consolidated Financial Position ………………………………………… 2

4. Explanation Concerning Information regarding Consolidated Business Outlook ………………………………………… 2

5. Information about the summary of business results (Notes to Consolidated Financial Statements)

6. Change in significant subsidiaries during the current accounting period ………………………………………………… 3

7. Adoption of accounting method uniquely adopted to prepare consolidated financial statements

   for the current quarter ………………… 3

8. Changes in Accounting Policies, Accounting Estimates and Restatements ……………………………………………… 3

9. Consolidated Financial Statements

(1) Consolidated Balance Sheet ……………………………………………………………………………………………… 4-5

1. Consolidated Statements of Income and Comprehensive Income Consolidated Statements of Income

   Consolidated the first nine months of FY2015 statements of income………………………………………………… 6

   Consolidated Statements of Comprehensive Income

   Consolidated the first nine months of FY2015 statements of comprehensive income………………………………… 7

2. Notes to Quarterly Consolidated Financial Statements

(Notes to going concern)…………………………………………………………………………………………………… 8

(Notes to remarkable changes in Shareholders' Equity) …………………………………………………………………… 8

(Segment information)……………………………………………………………………………………………………… 8

(Significant Subsequent Events) …………………………………………………………………………………………… 8

1. Qualitative information about results for and at the end of the current quarter

   Although the Company was incorporated through a sole-share transfer on October 1, 2015 as a wholly owning parent company of Cosmo Oil Co., Ltd., in substance, the scope of consolidation has not changed. Accordingly, when items are compared against the same period of the previous year, Cosmo Oil Co., Ltd.'s operating results for the nine month period of the fiscal year ended March 31, 2015 (from April 1 to December 31, 2014) are used, and when items are compared against the previous fiscal year-end, Cosmo Oil Co., Ltd.'s financial position at the end of the fiscal year ended March 31, 2015 are used.

   
   

2. Explanation Concerning Information regarding Consolidated Operating Results

   Consolidated net sales for the first nine months of FY2015 were ¥1,731.5 billion (down ¥ 609.4 billion from the same period of FY2014), operating loss ¥19.6 billion (operating loss ¥15.7 billion in the same period of FY2014), ordinary loss ¥27.0 billion (ordinary loss ¥25.2 billion in the same period of FY2014) and net loss for the period ¥48.6 billion (net loss ¥62.1 billion in the same period of FY2014).

   The operating results for the first nine months of FY2015 by business segment are as follows：

   
   

3. As for petroleum business segment, the net sales decreased due to the decline in crude oil prices. Furthermore, profit declined by increasing of cost of sales that was the effect of inventory valuation caused by the decline in crude oil prices. As a result, the segment reported net sales of ¥1,718.0 billion for the first nine months of FY2015 (down ¥596.0 billion from the same period of FY2014) and segment loss of ¥41.5 billion (segment loss ¥58.0 billion in the same period of FY2014).

   
   

4. As for petrochemical business segment, net sales were ¥36.5 billion for the first nine months of FY2015 (down 4.4 billion from the same period of FY2014) by the decline in crude oil prices although sales volume of the petrochemical products increased. However, the segment reported segment income of 0.2 billion (segment loss ¥4.3 billion in the same period of FY2014).

   
   

5. As for oil exploration and production business segment, the segment reported net sales of 39.1 billion for the first nine months of FY2015 (down ¥21.7 billion from the same period of FY2014) and segment income of ¥14.4 billion (down ¥21.2 billion from the same period of FY2014) due to the decline in the sales price of crude oil.

   
   

6. Explanation Concerning Information regarding Consolidated Financial Position

   As for the Company's financial position on a consolidated basis as of the end of the third quarter of FY2015, total assets as of December 31, 2015 amounted to ¥1,372.1 billion, down ¥56.5 billion from March 31, 2015, the end of FY2014, mainly reflecting decreased accounts receivable-trade, inventories, and accounts payable-trade due to the decline in crude oil prices. Net assets as of December 31, 2015 amounted to ¥157.8 billion, with a net worth ratio of 8.5%.

   
   

7. Explanation Concerning Information regarding Consolidated Business Outlook

The consolidated business outlook for the full year of FY 2015 was revised due to increase of inventory valuation loss attributable to the drop in crude oil prices, compared with the consolidated business outlook announced on 5 November, 2015.

This business outlook is based on the assumptions of estimated crude oil price at US$45.4/ barrel and exchange rate at JPY121.0/US$.

(Assumptions at the previous forecast: crude oil price US$55.3 per barrel, exchange rate JPY120.9 per US$)

8. Information about the summary of business results (Notes to Consolidated Financial Statements)

   
   

9. Change in significant subsidiaries during the current accounting period：

   For the reason that GYXIS CORPORATION (Cosmo Petroleum Gas Co., Ltd changed its corporate name to GYXIS CORPORATION on April 1, 2015) correspond to the jointly controlled entities, the company is not included in the scope of consolidation, but applied Equity Method from the first quarter of fiscal year ending March 2016.

   
   

10. Adoption of accounting method uniquely adopted to prepare consolidated financial statements for the current quarter：

    Tax expenses for Cosmo Oil Co., Ltd. and some of its consolidated subsidiaries are calculated by multiplying a reasonably estimated effective tax rate by net income before taxes for FY 2015.

    Income tax adjustments are included in the "income taxes" account stated in "Consolidated Statements of Income".

    
    

11. Changes in Accounting Policies, Accounting Estimates and Restatements： Changes in Accounting Policies

(Application of Accounting Standard for Business Combinations）

The Accounting Standard for Business Combinations (Accounting Standards Board of Japan (ASBJ) Statement No.21 of September 13, 2013), the Accounting Standard for Consolidated Financial Statements (ASBJ Statement No.22 of September 13, 2013), and the Accounting Standard for Business Divestitures (ASBJ Statement No.7 of September 13, 2013) and others have been applied from the first quarter of the consolidated fiscal year under review. Differences caused by changes in Cosmo Oil Co., Ltd.

in subsidiaries that continue to be under its control are recorded as capital surplus, and expenses related to acquisition are now recorded as expenses for the consolidated fiscal year in which they were incurred. In addition, regarding business combinations conducted after the beginning of the first quarter of the consolidated fiscal year under review, revisions to the purchase price allocation following the determination of the provisional accounting methods are now reflected in the quarterly financial statements for the quarterly period of the consolidated fiscal term in which the business combination occurred. In addition, the quarterly net income and other statements have been changed accordingly, and minority interest has been changed to non- controlling interest. To reflect these changes, the financial statements for the first nine months of the previous consolidated fiscal term and the previous consolidated fiscal year have revised.

The Accounting Standard for Business Combinations and other standards are applied in accordance with the transitional treatment stipulated in Paragraph 58-2 (4) of the Accounting Standard for Business Combinations, Paragraph 44-5 (4) of the Accounting Standard for Consolidated Financial Statements and Paragraph 57-4 (4) of the Accounting Standard for Business Divestitures, and are applied from the beginning of the first nine months of the consolidated fiscal term under review onwards.

The effect of the application of the accounting standard has little effect on consolidated financial statements and segment information for the first nine months of FY2015.

12. Consolidated Financial Statements

1. Consolidated Balance Sheet

   
   

   Assets

   Current assets

   
   

   3Q FY2015

   (As of December 31, 2015)

   
   

   (Unit：million yen)

   
   

   Cash and deposits	71,606
   Notes and accounts receivable-trade	183,789
   Merchandise and finished goods	116,654
   Work in process	683
   Raw materials and supplies	103,077
   Other	49,256
   Allowance for doubtful accounts	-156
   Total current assets	524,910

   Noncurrent assets

   Property, plant and equipment

   
   

   Machinery, equipment and vehicles, net	138,377
   Land	304,865
   Other, net	184,832
   Total property, plant and equipment	628,076
   Intangible assets Investments and other assets Investment securities	47,172 139,714
   Other	32,188
   Allowance for doubtful accounts	-540
   Total investments and other assets	171,362
   Total noncurrent assets	846,611
   Deferred assets
   Bond issuance cost	528
   Total deferred assets	528
   Total assets	1,372,050

   Liabilities

   Current liabilities

   
   

   Notes and accounts payable-trade	86,395
   Short-term loans payable	250,429
   Accounts payable-other	181,555
   Income taxes payable	1,186
   Provision	2,429
   Other	29,508
   Total current liabilities	551,505
   Noncurrent liabilities
   Bonds payable	40,700
   Long-term loans payable	519,704
   Net defined benefit liability	7,293
   Provision	14,378
   Other	80,662
   Total noncurrent liabilities	662,739
   Total liabilities	1,214,245

   
   

   Net assets

   
   

   3Q FY2015

   (As of December 31, 2015)

   (Unit：million yen)

   
   

   Shareholders' equity Capital stock	40,000
   Capital surplus	84,213
   Retained earnings	-40,327
   Treasury shares	-1,213
   Total shareholders' equity	82,671
   Accumulated other comprehensive income
   Valuation difference on available-for-sale securities	6,276
   Deferred gains or losses on hedges	-159
   Revaluation reserve for land	21,315
   Foreign currency translation adjustment	8,830
   Remeasurements of defined benefit plans	-2,040
   Total accumulated other comprehensive income	34,221
   Minority interests	40,911
   Total net assets	157,804
   Total liabilities and net assets	1,372,050

2. Consolidated Statements of Income and Comprehensive Income (Consolidated Statements of Income)

   (Consolidated the first nine months of FY2015 statements of income)

   
   

   3Q FY2015

   (From April 1, 2015

   to December 31, 2015)

   
   

   (Unit：million yen)

   
   

   Net sales 1,731,461

   Cost of sales 1,662,747

   
   

   Gross profit 68,713

   
   

   Selling, general and administrative expenses 88,320

   
   

   Operating loss -19,606

   
   

   Non-operating income

   Interest income 93

   Dividends income 1,188

   Other 3,013

   
   

   Total non-operating income 4,295

   
   

   Non-operating expenses

   Interest expenses 9,598

   Share of loss of entities accounted for using equity method 545

   Other 1,531

   
   

   Total non-operating expenses 11,674

   
   

   Ordinary Loss -26,985

   
   

   Extraordinary income

   Gain on sales of noncurrent assets 133

   Gain on sales of investment securities 161

   Gain on charge in equity 1,565

   
   

   Total extraordinary income 1,860

   
   

   Extraordinary loss

   
   

   Loss on sales of noncurrent assets	13
   Loss on disposal of noncurrent assets	3,880
   Impairment loss	497
   Loss on valuation of investment securities	33
   Business structure improvement expenses	3,026
   Other	802
   Total extraordinary losses	8,254
   Loss before income taxes	-33,379
   Income taxes	12,284
   Loss	-45,664
   Profit attributable to non-controlling interests	2,936
   Loss attributable to owners of parent	-48,600

   (Consolidated Statements of Comprehensive Income)

   (Consolidated the first nine months of FY2015 statements of comprehensive income)

   
   

   3Q FY2015

   (From April 1, 2015

   to December 31, 2015)

   
   

   (Unit：million yen)

   
   

   Loss Other comprehensive income Valuation difference on available-for-sale securities	-45,664 755
   Deferred gains or losses on hedges	-863
   Revaluation reserve for land	-47
   Foreign currency translation adjustment	35
   Remeasurements of defined benefit plans	956
   Share of other comprehensive income of entities accounted for using equity method	-1,913
   Total other comprehensive income	-1,077
   Comprehensive income	-46,741
   (Breakdown)
   Comprehensive income attributable to owners of the parent	-49,676
   Comprehensive income attributable to non-controlling interests	2,935

3. Notes to Quarterly Consolidated Financial Statements (Notes to going concern)

   None

   
   

   (Notes to remarkable changes in Shareholders' Equity) None

   
   

   (Segment Information)

   3Q FY2015 (From April 1, 2015 to December 31, 2015)

   Information about net sales and income or loss amounts by segment reported

   
   

   Oil exploration

   
   

   Other

   
   

   Adjustments

   
   

   (Unit：million yen) Consolidated

   
   

   Net sales

   Outside customers Inter-segment

   Total

   Segment Income (Loss)

   Petroleum Petrochemical

   1,682,751 35,200	14,695 21,806	17,127 22,013	16,886 35,515	― -114,536	1,731,461 ―
   1,717,951	36,502	39,140	52,401	-114,536	1,731,461
   -43,574	182	14,447	1,812	147	-26,985

   and production

   Note：1

   Note：2

   Note：3

   Note 1 "Other" is segment of non-classified, including construction works, insurance agency, leasing, travel agency and wind power generation, etc.

4. Segment Income (Loss) in "Adjustments" 147 million yen includes 248 million yen for the net amount of the entire Company's income and expenses not allocated to the reporting segments or the "Other" category, 74 million yen for internal eliminations, 541 million yen for inventory adjustments and -716 million yen for adjustment of fixed assets.

5. Segment Income (Loss) is adjusted to ordinary loss of Consolidated quarterly statements of income.




(Significant Subsequent Events)

(Company Split of Management Business of Group Companies) The Transaction Under Common Control

Cosmo Energy Holdings Co., Ltd. (hereinafter the "CEH") succeeded the group corporate planning, management support and management administration departments spun off from the wholly-owned subsidiary Cosmo Oil Co., Ltd., on January 1, 2016.




1. Overview of the Transaction

2. The name of combined business and the contents of the business

   The name of the business: Group Company Management Business

   The contents of the business: management control of CEH's group companies involved in comprehensive petroleum business and any other business incidental thereto.

3. The date of corporate combination January 1, 2016

4. Legal form of business combination

   Simple absorption-type company split whereby Cosmo Oil Co., Ltd. became the splitting company and both CEH became the succeeding companies.

5. The purpose of the transaction

In order to realize optimal management resource distribution centripetally from a group-wide perspective, "monitoring of the group's management" will be separated from "business execution" and CEH will focus on determination of the group's management policy.

Cosmo Oil Co., Ltd. issued 1,200 new class shares to allocate the third-party, CEH, on January 1, 2016.

In order to improve fund-raising capability of our group, we have transferred the land within the consolidated group on January 4, 2016. The impact of the revaluation reserve for land and the adjustment of the tax effect by the transaction is still calculating.

6. Outline of Accounting Treatment

The transaction was treated as a transaction under common control based on "Accounting Standard for Business Combinations (ASBJ Statement No.21of September 13, 2013)" and "Guidance on Accounting Standard for Business Combinations and Accounting Standard for Business Divestitures (ASBJ Guidance No.10 of September 13, 2013)."