Good afternoon. I'm Miyata, President of the company. Thank you for your continued support and advice regarding ENEOS Group's business activities. I would like to take this opportunity to thank you for your support. I will now explain the financial results for the second quarter of fiscal year 2024 using the handout materials. Please refer to page 3. This slide shows highlights of the first half's results and the full year forecast. Operating profit for the first half of FY24 was JPY 146 billion, and the net profit attributable to owners of the parent was JPY 68.2 billion. The year-over-year decrease is mainly due to deterioration in the inventory impact, negative time lag, and absence of one-time gain recorded in the previous year in the metals business. Please take a look at the lower panel.
For the full year, we have revised up our May forecast to JPY 420 billion in operating profit and JPY 220 billion in net profit. In addition to such positive environmental factors as the yen's depreciation and rising copper prices, we are expecting margin improvement of petroleum products, sales expansion in the oil and natural gas E&P business, and the sales expansion of ICT materials in the metals business. From page 4, I will explain the progress of the third medium-term management plan. Page 5, please. One of the three pillars of the third medium-term management plan is the establishment of a solid earning space. First, in the petroleum products business, the ratio of unplanned capacity loss, or UCL, at refineries in the first half of this fiscal year was 5%, a deterioration compared with the plan, but an improvement of 3% compared with the previous year.
Please see the graph in the upper left. In Q2 of last year, refinery issues were caused by non-regular work when restarting operation after a shutdown maintenance. This year, we have had fewer issues thanks to efforts to improve construction quality and operating excellence. As of October, everything is under control. In order to achieve our target UCL of 4% this fiscal year, we will continue to implement measures against refinery issues. Please take a look at the lower panel. In high-performance materials, we have positioned SSBR, a raw material of fuel-efficient tires, and binders for batteries used in EV lithium-ion batteries, as strategic products, and are expanding their sales volume steadily. Page 6, please. In the electricity business, the Goi Thermal Power Plant, a cutting-edge, high-efficiency LNG power plant, has started operation. Full operation is expected to start by the end of this fiscal year.
We will utilize the in-house power supply and build a sales system that minimizes dependence on purchased electricity from the market. In the renewable energy business, we are acquiring customers through long-term fixed-price contracts and steadily building up power generation capacity. Please go to page 7. In the oil and natural gas E&P business, we are steadily implementing initiatives to maximize value, such as capacity expansion in Indonesia and additional development in Malaysia. LNG is increasingly recognized as a fossil fuel, which is necessary to support the transition towards a decarbonized society, and we will be focusing on this area. In the metals business, we are expanding production capacity in the semiconductor and ICT areas, where high growth is expected in the future. We are making steady progress on the business process re-engineering initiative, as shown in the lower panel.
Pages eight and nine show the progress of the second pillar of the third medium-term management plan, initiatives for the realization of energy transition. We are steadily implementing initiatives in the areas such as CCS, renewable energy, SAF, so that we can make flexible investments when the key player of next-generation energy will become clear while considering trends in national policies and global carbon neutrality. These pages are a summary of the press releases we have issued so far, so please refer to them for more details later. Please turn to page 10. From this page, I will explain the progress of the third pillar of the third medium-term management plan, enhancement of the management base. The first point is about the listing of shares of JX Advanced Metals Corporation, or JXAM.
In order to further enhance corporate value of ENEOS Holdings and JXAM, listing of shares of JXAM has been prepared for some time. In this October, we applied for listing on the Tokyo Stock Exchange. The listing will enable us to properly demonstrate JXAM's high growth potential to the stock market and execute investment for business portfolio reform and prompt and steady returns to shareholders. In addition, from the perspective of enhancement of group governance, we have established a group investment assessment system and tightened the assessment process. For investments exceeding a certain amount, a specialty team conducts cold eye reviews from multiple perspectives according to the progress of each project. Specifically, we will conduct more rigorous investment assessment for projects that are particularly important to our management strategy. Please turn to page 11 for the progress in balance sheet management.
While reforming business portfolio and reviewing owned assets and businesses based on asset efficiency, we have been working to optimize our balance sheet in a comprehensive manner by pursuing an optimal equity structure and reduction of equity costs. I will not explain each initiative in detail, but we will continue to improve asset and capital efficiency through further promotion of balance sheet management. Please turn to page 12. This page is about the progress of the group human resource strategy and digital strategy. As shown in the upper part of the slide, we have been reviewing the management succession plan, and in this first half, we have restructured the system for appointing management personnel. We are also making steady progress in our digital strategy and will continue to promote DX, leading to continuous business transformation and profit improvement.
Please refer to the text of the slide later for more detail of each initiative. Please turn to page 14 for shareholder returns. As I have explained, with the solid progress of the third medium-term management plan, we have decided to raise the level of shareholder return and will increase the annual dividend for FY2024 by JPY 4 to JPY 26 per share. This decision was made at this time to show my determination to achieve the goals of the medium-term management plan and our focus on shareholders. Please refer to the lower right of the slide. The total return in FY24 is expected to be approximately JPY 270 billion, including the annual dividend with a JPY 4 increase and ongoing share buybacks, and the average total payout ratio for FY23 and FY24 is expected to be 85%.
We will continue to accelerate our efforts to achieve the goals of the medium-term management plan and strive to enhance our corporate value. That concludes my presentation. Next, our CFO, Mr. Tanaka, will continue for the details of the financial results.
I'm Tanaka. I'll explain financial results for the second quarter of FY2024 and the forecast for the full year. Please turn to page 16. The Dubai crude oil price, shown in red line graph, declined from $88 at the beginning of the year to $73 as of the end of the period, amid lingering concerns over the situation in the Middle East and global economic slowdown, with the average for the period around $82 per barrel, unchanged from the previous year. The average LME price, shown in yellow, is $0.43 per barrel, up $0.48 from the previous year due to the production cuts agreed among Chinese smelters and the elevated supply risk from Russian metal trading regulations. The average exchange rate was ¥153, the yen's depreciation of ¥12, reflecting the interest rate gap between the two countries. Next, please see page 17.
The petroleum product margin index on the left remained strong, though it was slightly lower than the previous year, mainly due to the negative time lag from the decline in crude oil prices. The petroleum margin index deteriorated from the previous year, mainly due to oversupply on the back of lower gasoline demand. Pages 19 and 20 provide a summary of financial results and operating profit by segment. Details are explained in the waterfall chart starting on page 21. Moving on to page 21, the operating profit in petroleum products, excluding inventory valuation, decreased JPY 72.3 billion year-on-year to JPY 54.7 billion.
Despite the improvement of petroleum product and export margins, excluding time lag, by JPY 27 billion due to the time lag impact of JPY 83.8 billion amid decline in crude oil prices and the absence of one-time gain from sale of assets of JPY 17.8 billion recorded last year.
Operating profit of high-performance materials on the right was up JPY 6.6 billion to JPY 9.1 billion due to increased sales of elastomer and high-performance materials, high butadiene prices, and improved margins resulting from the weaker yen. Next, please see page 22. Operating profit of electricity on the left increased JPY 8.9 billion to JPY 14.2 billion due to improved margins, entry into the VPP supply-demand balancing market, and the one-time profit from the revision of revenue recognition timing due to the business separation. Operating profit of renewable energy on the right side is flat from last year at around JPY 1.4 billion due to the negative impact of worsening wind conditions, equipment failure, and increased expenses offset by the positive impact by reviewing the service life of power plants. Next, page 23.
Operating profit in oil and natural gas E&P declined JPY 5 billion year-on-year to JPY 46.7 billion despite the volume growth from the Indonesia and Tangguh expansion project due to the absence of a one-time accounting impact from the conversion of Japan Drilling Corporation into a subsidiary in FY 2023 and the higher labor and material costs. Operating profit in the metals segment decreased JPY 5.3 billion to JPY 66.8 billion, although profits increased in semiconductor and ICT materials thanks to sales growth after normalization of supply chain inventory. Profits decreased year-on-year in metals and recycling due to the reversal of foreign exchange valuation gain recorded in metals and recycling last year following the sale of Caserones copper mine.
On page 24, I will explain consolidated balance sheets and cash flows. First, let me explain the cash flow on the right. Please refer to the figures, excluding the impact of lease accounting indicated by a dotted line box. Cash flows from operating activities in the first half was cash inflow of JPY 86.7 billion, mainly due to JPY 208.2 billion for operating profit excluding inventory valuation and JPY 141.9 billion for depreciation and amortization. Other includes working capital increase with the holiday impact of JPY 93.2 billion and inventory pile-up for winter, etc. Cash flows from operating activities excluding the holiday impact was cash inflow of JPY 179.9 billion.
Cash flows from investing activities was cash outflow of JPY 157.7 billion. As a result, free cash flow was cash outflow of JPY 71 billion, and real free cash flow considering the holiday impact was cash inflow of JPY 22.2 billion.
Net cash flows, including dividend payment and share buybacks, was cash outflow of JPY 260.7 billion. Given these factors, as shown in the balance sheet on the left, net interest bearing debt excluding cash and cash equivalents was JPY 2,248.2 billion, an increase of JPY 248.2 billion from the end of the previous fiscal year, and net debt-to-equity ratio was 0.54 times. Next, I will explain the full year forecast. Please refer to page 26. Main indices used as our assumption from October are: $80 per barrel for Dubai crude oil, 413 cents per barrel for copper, JPY 145 to the dollar. Based on these indices, we have revised our full year forecast for operating profit to JPY 420 billion, an increase of JPY 20 billion from the forecast in May. Operating profit excluding inventory valuation is expected to be JPY 420 billion, an increase of JPY 20 billion.
Profit attributable to owners of the parent excluding inventory valuation is estimated to be JPY 220 billion, an increase of JPY 10 billion. Let me skip page 27 as it overlaps with waterfall charts from the next page. Please turn to page 28. Operating profit excluding inventory valuation for petroleum products is now forecasted as JPY 125 billion, JPY 15 billion lower than the May forecast, affected by a decline in sales volume due to lower export prices and deteriorated margin, despite the improvement of the margin in petroleum products. Operating profit for high-performance materials on the right is expected to be JPY 11 billion, which is at the same level as the May forecast.
While both elastomers and high-performance materials businesses are expected to be worsened due to lower sales volume and higher expenses, this will be offset by margin improvement, mainly due to the weak yen. Please turn to page 29.
Operating profit for electricity on the left is expected to increase JPY 11 billion from the May forecast to JPY 17 billion due to profit improvement in wholesale and one-time profit. Operating profit for renewable energy on the right is expected to increase by JPY 4 billion from the May forecast to JPY 1 billion, mainly due to profit improvement achieved by reviewing the service life of power plants despite the worsening wind conditions, equipment failure, and increased expenses. Next, please refer to page 30. Operating profit for oil and natural gas E&P on the left is expected to be JPY 80 billion, unchanged from the May forecast, due to higher sales volume from the steady operation of the Tangguh expansion project in Indonesia, higher resource prices, and the weaker yen, despite expected increase in expenses.
Operating profit for metals on the right is expected to be JPY 90 billion, up JPY 20 billion from the May forecast, mainly due to higher sales volume of ICT materials, in addition to the positive change in the environment, such as higher copper prices and a weaker yen. That is all for my explanation. After page 31, assumptions and sensitivities are provided for your reference later.