Idemitsu books $36 million first quarter loss on remittance fraud at Hong Kong unit

08/06/2020 | 04:19am

Japanese oil refiner Idemitsu Kosan Co said on Thursday it booked a special loss of 3.8 billion yen ($36 million) related to a remittance fraud at its chemicals unit in Hong Kong in the April-June quarter.

Idemitsu Chemicals (Hong Kong) Co., Ltd., which distributes engineering plastics in Hong Kong and China, has filed a complaint with local police after finding that the fraud had been done by a malicious third person, a spokesman at Idemitsu said.

The fund outflow was found in January, he said, but declined to give further details, saying authorities were investigating.

For the April-June quarter, Idemitsu booked a net loss of 81.3 billion yen due to 94.4 billion yen in inventory losses because of a slump in oil prices.

Weaker demand for gasoline and jet fuel amid coronavirus lockdowns added to pressure, it said.

But Idemitsu kept its net profit forecast of 5 billion yen for the year to next March.

"Demand for petroleum products have been recovering in June and July after a slump in April and May," Yoshitaka Onuma, the general manager of the finance department, told a news conference.

"We expect the trend will continue, but there is also uncertainty as the number of new coronavirus infection cases is on the rise in Japan and across the globe," he said.

The run rate at its refinery fell to 70% in the quarter from 87% in the last financial year ended March, but it picked up in July and is expected to improve further later this year, Onuma said.

By Yuka Obayashi

© Thomson Reuters 2020
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