Replacing the ministry-alumnus president with the first insider, and raising the dividend floor (2024)

Between a state-policy origin and the share price

To read the arrival of an insider president as liberation from bureaucratic appointments departs from the facts. His predecessor, Fujita Masahiro, remained as representative chairman, and the government stayed the largest shareholder with about 38%. What was entrusted to Yamashita Michio appears to have been not a rearrangement of control but the work of answering, in the company’s own words, for cash that had piled up to ¥191.9 billion and a share price below net assets. A career from 1982 spent in finance, including work on the 2003 listing, fitted that role.

Even so, much of what this succession has shown so far remains figures in a plan. The 100,000 boe/d of production and ¥40 billion of after-tax business profit for fiscal 2031 are targets to be built up from a starting point just under ¥20 billion, and achieving them depends on acquiring assets in the United States. Raising the dividend floor to ¥40 is a measure to ease investors’ anxiety; expanding shareholder returns as such has been deferred until after 100,000 boe/d is reached. Whether the work of facing the market while carrying the origin of a state-policy company succeeds cannot be measured until the numbers arrive.