Japan's Cosmo to allocate 30% of investment in green energy in next 3 years

March 24, 2023 12:01 AM AEDT | By Reuters
Follow us on Google News:
Image source: Reuters

TOKYO (Reuters) - Japan's third-biggest oil refiner, Cosmo Energy Holdings Co Ltd, will make an investment of 420 billion yen ($3.2 billion) in the next three years, with 30% to be allocated in green power and energy such as sustainable aviation fuel (SAF).

Under a new 3-year business plan starting next month, 100 billion yen will be spent on a green electricity supply chain, including 83 billion yen on wind power, while 40 billion yen will be used on next-generation energy, including 25 billion yen on SAF.

"We expect domestic demand for petroleum products will keep falling 2-3% a year and the pace of gasoline demand drop will be accelerated from around 2030 due to rapid penetration of electric vehicles," Shigeru Yamada, senior executive officer, told a news conference.

"So we are increasing our spending in green power and energy," said Yamada, who will become the president from April 1.

Still, Cosmo plans to invest 280 billion yen on its mainstay oil business, including oil development and petrochemical.

In the year to March 2026, Cosmo aims to boost its recurring profit to 165 billion yen, excluding the impact of inventory valuation, up from an expected 140 billion yen for the current year.

To improve shareholder returns, the company has set a goal of a cumulative payout ratio of 60% or more for the next three years, against 22% in the past five years, while setting a minimum dividend payment of 200 yen per share.

The move comes after City Index Eleventh, a Japanese fund backed by veteran activist investor Yoshiaki Murakami, raised its stake in Cosmo to nearly 20% by early January, asking the company to improve shareholder returns and spin off its renewable energy segment.

"We believe the value of our renewable energy unit could be maximized if it was within our group, which has already sales and power supply adjustment functions," Yamada said.

($1 = 131.2800 yen)

(Reporting by Yuka Obayashi; Editing by Chizu Nomiyama)


The above content is directly sourced from Reuters under a contractual arrangement. The content is being provided as a convenience and for informational purposes only; and does not constitute an endorsement or approval by Kalkine Media of any of the products, services, or opinions of the organization or individual. The user is apprised that Kalkine Media bears no responsibility for the accuracy, legality, or content of Reuters, any external sites, or for that of subsequent links. The user is requested to contact Reuters directly for answers to questions regarding the content. Please note that Kalkine Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.

Top ASX Listed Companies

We use cookies to ensure that we give you the best experience on our website. If you continue to use this site we will assume that you are happy with it. OK