Oil and Gas Explorers Q2 FY2026: INPEX posts record profit as JAPEX slumps
Companies compared · 2
INPEX
1605
JAPEX
1662
Takeaway
Record-high profitability at INPEX contrasted with a sharp JAPEX earnings slump.
Oil and gas explorers INPEX and JAPEX delivered contrasting 2026 interim and first-quarter results: INPEX's operating profit rose 0.3% to a record, while JAPEX's fell 62.9%. Their reporting periods differ, at six months and three months.
Industry Trends
- Oil prices and foreign exchange shaped earnings. INPEX benefited from an 8.2% year-on-year rise in oil prices and a weaker yen. The average exchange rate was ¥158.37 to the dollar, 6.7% weaker than a year earlier.
- Lower sales volumes were a shared challenge. INPEX's crude oil sales volume fell 22.8% year on year. JAPEX was also affected by lower sales volumes.
- Geopolitical risks drove up procurement costs. JAPEX's LNG procurement costs increased amid the closure of the Strait of Hormuz.
- Earnings diverged sharply. INPEX's operating profit rose 0.3% year on year, while JAPEX's fell 62.9%.
Operating Profit Ranking
INPEX stood out in operating profit and kept it slightly higher year on year. Lower sales and higher procurement costs combined to drive a steep decline at JAPEX.
Operating Margin Ranking
INPEX had the higher margin, supported by stable production at projects such as Ichthys and favorable oil prices and exchange rates. Higher costs weighed on JAPEX's profit.
Revenue, Year-on-Year Change
Revenue declined at both companies, with a steeper drop at JAPEX. Lower sales volumes contributed, while the reporting periods also differ, at six months and three months.
Net Profit, Year-on-Year Change
INPEX increased net profit while JAPEX recorded a sharp decline. The benefits of oil prices and a weaker yen contrasted with burdens including higher LNG procurement costs.
Winner and Loser
INPEX generated revenue of ¥1.0005 trillion, far exceeding JAPEX's ¥65.1 billion. Revenue fell 4.6% and 21.4%, respectively. However, INPEX's results cover six months, compared with three months for JAPEX.
INPEX also led in operating profit, at ¥618.7 billion versus JAPEX's ¥6.2 billion. Operating profit rose 0.3% at INPEX and fell 62.9% at JAPEX. Operating margins were 61.9% and 9.5%, respectively.
Net profit rose 17.7% at INPEX and fell 79.4% at JAPEX. Higher oil prices and a weaker yen, along with increased production, supported INPEX. JAPEX faced both lower sales and higher LNG procurement costs. The gap in earnings power was stark, but the different reporting periods mean the results are not directly comparable.
Winner
INPEX
Laggard
JAPEX
Revenue Ranking
INPEX's revenue was far higher than JAPEX's. However, INPEX reported six months of results and JAPEX three, so the difference in reporting periods must be considered.
Strategic Moves to Watch
INPEX raised its full-year forecast and plans to increase its dividend. The company lifted its assumptions for oil prices and foreign exchange, aiming to channel its current earnings strength into shareholder returns and growth. Its full-year operating profit forecast is ¥1.223 trillion.
JAPEX announced the acquisition of U.S. tight oil and gas assets and the sale of policy shareholdings. With its existing business reporting lower profit, the company is investing in North American assets. Its full-year operating profit forecast is ¥46 billion. Investors will watch how quickly the acquired assets contribute earnings and what funding burden they bring.
Common Industry Risks
- Oil price swings. Rising prices support selling prices, but declines can weigh on earnings.
- Currency moves. A weaker yen can boost yen-denominated revenue while also raising overseas procurement costs.
- Geopolitical risks. Disruptions to shipping or procurement, including from a strait closure, can increase costs or reduce sales.
- Changes in sales volumes. Shifts in resource output or operating conditions feed directly into revenue and profit.
- The burden of major investments. JAPEX's U.S. asset acquisition will require scrutiny of investment returns and its effect on the company's finances.
How to Read the Comparison
The figures cover INPEX's interim period for the fiscal year ending December 2026 and JAPEX's first quarter for the fiscal year ending March 2027. They place six months of results alongside three months, so revenue and profit amounts are not like-for-like comparisons. Rankings and averages should be treated as indicators of scale; year-on-year changes, margins and each company's operating environment also matter.
For Students and Job Seekers
INPEX's results show how stable operations at large overseas projects and market analysis can support earnings. At JAPEX, procurement and investment decisions are also important alongside resource development. In an industry exposed to big shifts in commodity prices and global affairs, technical employees also need to understand the business and its markets.