Credit: REUTERS/ISSEI KATOBy Yuka Obayashi
TOKYO, May 12 (Reuters) - Japan's biggest oil refinery Eneos Holdings Inc 5020.T said on Wednesday it would exit the coal mining business and sell some upstream oil assets to raise cash, as it cut its mid-term profit target by a fifth.
It said accumulated operating profit in the three years to March 2023 would be 22% lower than it had expected last year, tracking a similar downgrade by its peer Idemitsu Kosan 5019.T on Tuesday.
"The pandemic has slashed local fuel demand by 10% in the last financial year and it will continue to weigh on demand through 2022," Eneos President Katsuyuki Ota told a news conference.
Eneos now predicts accumulated operating profit for the three years at 760 billion yen ($7 billion).
It raised its forecast for asset sales over the same period to 220 billion yen from 150 billion, Ota said, adding that Eneos would exit coal mining also in response to a global decarbonisation push.
Eneos plans to sell its 13.3% stake in the Bulga coal mine in Australia and 25% stake in Canada's Sukunka Suska mine, and will consider divesting some upstream oil assets, a spokeswoman added.
To expand overseas, Eneos may raise its stake in Vietnam National Petroleum Group (Petrolimex) PLX.HM to about 15%, or the level domestic regulations allow, and broaden collaborations, Ota said.
In February, Eneos said it had raised its Petrolimex stake to 9% from 8%.
For the year to March, it reported a 114 billion yen net profit, against a 188 billion yen loss a year earlier, helped by inventory valuation gains as crude oil prices rose.
It forecast a 23% rise in profit for this year, with stronger oil prices bolstering its oil and gas development businesses.
($1 = 108.7000 yen)
(Reporting by Yuka Obayashi; Editing by Clarence Fernandez and John Stonestreet)
((Yuka.Obayashi@thomsonreuters.com; +813-4563-2761;))
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