Japan’s top oil and gas explorer boosts shareholder returns despite falling profit

Japan’s biggest oil and gas explorer, Inpex, is boosting shareholder returns to a record high despite posting a drop in first-half net profit.

Thursday, Inpex reported a net profit of $1.5 billion (¥212.5 billion) for the six months ended June 30, 2024, which was down 14.5% from the same period last year.

However, Inpex’s revenue and operating profit were up 10.4% and 15.3%, respectively, compared to year-ago levels.

The decrease in net profit was attributed to higher tax payments and exploration expenses in Australia.

Inpex has decided to significantly increase shareholder returns and deepen the dialogue with investors after analyzing what have been the influences on the performance of its shares to date.

The company launched a ‘Sustainable Growth of Corporate Value’ initiative in August 2023 and aims to strengthen shareholder returns after receiving feedback on investor return uncertainty.

For 2024, Inpex now forecasts record shareholder returns in terms of value and a record total payout ratio of around 65%.

This is up from 60.6% for 2023 and a previous high of 61.9% for 2021.

Inpex raised its dividend per share forecast for 2024 and announced an additional share buyback, bringing total share buybacks for the year to $884 million (¥130 billion).

“Given our strong earnings outlook for the full year, we have decided to buy back additional shares and significantly increase the dividend,” Daisuke Yamada, senior vice president, told a news conference reported by Reuters.

One of Inpex’s most important projects outside Japan is the Ichthys LNG facility offshore Australia. Inpex is the operator of the export plant and has France’s TotalEnergies as its major partner, plus the Australian subsidiaries of CPC Corporation Taiwan, Osaka Gas, Kansai Electric Power, JERA and Toho Gas.

Ichthys’ annual production capacity is 8.9 million metric tons of LNG.

By Charles Kennedy for Oilprice.com

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