Japan’s JXTG sees profit hit from lower oil prices amid coronavirus

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’s biggest JXTG Holdings said on Thursday its profitability is likely to be hit by the fall in oil prices caused by a coronavirus outbreak in China that has cut demand for commodities.

Each $5 decline in prices will potentially reduce the company’s annual operating profit by 32.5 billion yen ($296 million), JXTG Senior Vice President Yoshiaki Ouchi said, adding that it was too early to be precise on the impact.

Brent , the global oil benchmark, has fallen by more than $14, or around a fifth, from its 2020 highs in early January, as the coronavirus outbreak has hit sentiment and demand for oil in China, the world’s biggest importer of the .

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The Chinese province where the outbreak started in December reported its biggest rise in the death toll yet on Thursday using a new diagnostic method, while sacked two local leaders over their handling of the crisis.

JXTG said its operating profit had dived 52% to 221.44 billion yen in the nine months ended December 2019, hit by a decline in resource prices and margins in its .

However, the company maintained its forecast for financial year ending March 31.

“The outbreak may affect our chains in China or traffic use but so far nothing can be forecasted since the Lunar New Year holiday just ended,” Ouchi said.

“We are running branches in China with as few as possible,” he said.
Source: Reuters (Reporting by Yuki Nitta; Writing by Aaron Sheldrick; Editing by Tom Hogue and Sherry Jacob-Phillips)

Source: Investing.com

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