I am Miyata, Executive Vice President of ENEOS Holdings. I'd like to take this opportunity to thank our shareholders and investors for your continued support and advice for the business activities of the ENEOS Group. First of all, before explaining the financial results for the third quarter, I would like to explain the current status of verification of recurrence prevention measures in relation to the misconduct occurred last year. It is a matter for great regret that last year and the year before, our representative directors engaged in misconduct for two years in a row. I apologize again to all our stakeholders for any inconvenience caused. We are determined that this is our last chance to restore your trust, we are proceeding with deliberations and initiatives to prevent a recurrence of such misconduct. From this point on, let me take a seat to continue explanation.
Please turn to page four. In response to the misconduct of the former chairman in 2022, we had formulated and promoted the reinforcement and re-emphasis of efforts for respect for human rights and compliance, such an incident has occurred again. We take this very seriously, we are in the process of diligently validating the effectiveness of the measures we have taken so far to ensure compliance with analysis and evaluation by a third-party organization. We have been told that as a result of the analysis, human resources, due diligence for selection of directors, and training for officers, both introduced last fiscal year, needed to be enhanced. Currently, an effective director selection process is deliberated mainly by outside directors to make it a measure to prevent a recurrence of such a misconduct. This time, we have disappointed our group employees, who are important stakeholders for the company.
In order to restore their trust and to ensure comfortable work environment as a first step under the current management system, initiatives for our employees are led mainly by two female outside directors and us three Executive Vice Presidents. Through interviews and employee surveys led by a third party, the project is investigating whether there are any potential issues will execute specific measures under the new management system. At the end of this month, we'll announce the details of the new selection process, the new president to be selected with this process, and the measures to prevent recurrence of misconduct. That is all for my explanation of the status of verification of recurrence prevention measures. I will explain the financial results for the third quarter of FY 2023. Please turn to page six for highlights of financial results.
Operating income for the third quarter of FY 2023 was JPY 386.3 billion, a significant increase of JPY 136.5 billion from the previous fiscal year. This includes a JPY 27.7 billion decrease in operating income due to a decrease in inventory valuation gain, resulting in a JPY 164.2 billion increase in operating income excluding inventory valuation. While segment profits of oil and natural gas, E&P, and metals decreased year-on-year due to a decline in resource prices and lower demand for semiconductors and ICT materials, the significant profit increase in the energy segment contributed to the results. The energy segment improved significantly due to a reversal of negative time lag in margins for petroleum products and exports, as well as improvements in actual margins for petroleum products, excluding the time lag and petrochemicals.
As shown in the graph on the right, operating income excluding time lag for the current fiscal year has been stable on a quarterly basis. Please refer to the bottom part of the slide. We have decided to have our full- year forecast remain unchanged from the previous forecast announced in November, considering the progress made in Q1 through Q3 and the risk of resource price fluctuations, including geopolitical factors. I will explain the progress of the Third Medium-Term Management Plan. Please turn to page eight. Here, I will explain UCL, or unplanned capacity loss, to indicate the percentage of unplanned shutdowns and slowdowns at refineries. Cumulative UCL performance from Q1 through Q3 was 8%, a 2% improvement year-on-year, as a result of our efforts to enhance facility maintenance strategies to share knowledge with construction contractors and to strengthen structure of construction contractor management.
As described in the facility maintenance section of the UCL trends by factor, certain number of troubles due to aging of facilities have continued to occur and has become more difficult to deal with such a trouble. In response to this issue, we have enhanced the support system for facility maintenance and inspection by organizing a team of specialists in the second half of FY 2023 as the refinery support by the head office specialists had been effective. As described at the bottom, making safety a top priority, we have begun our efforts to resume operation faster after solving a trouble. Regarding trouble caused by operation shown as the last section for the UCL trend, its cumulative results deteriorated year-on-year because of troubles due to non-regular work occurred in the second quarter.
In Q3, this number was reduced by approximately 60% from Q2 by implementing additional countermeasures. This indicates measures against trouble are steadily progressing. While it seems difficult to achieve the UCL target of 5% in this fiscal year and dealing with trouble is getting more difficult, we have confirmed some initiatives are producing solid results, and we will make an all-out effort to reduce UCL through these measures. We are also making steady progress on acceleration of initiatives for the realization of energy transition, which was set forth in the Third Medium-Term Management Plan. Please refer to page 23 later for the progress. Please turn to page nine for shareholder returns. Today, the company decided share buyback up to JPY 50 billion. As I explained earlier, although the UCL improvement has not achieved the plan, measures against trouble have steadily produced results.
Stable petroleum products margins and the capacity expansion of the Indonesian gas field, which was implemented as planned, financial results are performing well in general in the first year of the medium-term management plan. Net income excluding inventory valuation, which is the basis for shareholder returns, is expected to be JPY 200 billion, exceeding the initial plan of JPY 180 billion. Considering this situation, we have decided share buyback to demonstrate our commitment to achieving the goals and our emphasis on shareholders. For this fiscal year, the total return amount with the annual dividend of JPY 22 per share and JPY 50 billion in share buyback is expected to be approximately JPY 116 billion. The total return ratio for a single year is estimated at approximately 58%.
We will continue to return profits to shareholders in accordance with our return policy and use the proceeds for growth investment, including investment for energy transition. This concludes my explanation on the highlights of the financial results and the progress of the Third Medium-Term Management Plan. Next, Mr. Tanaka, our Senior Vice President, will take over to explain details of the financial results.
I am Tanaka. I'll explain the financial results for the third quarter of FY 2023. Please turn to page 11. The Dubai crude oil price indicated by the red line started at $84 per barrel at the beginning of this fiscal year and rose to the upper $90 range in September due to a sense of supply shortage caused by continued OPEC+ coordinated production cuts.
Subsequently, the price fell to $77 at the end of the third quarter due to the postponement of additional production cuts in November. The average price in the period from Q1 through Q3 was $83, down $14 year-on-year. The LME copper price in yellow was softened by concerns over the global economic slowdown and the slow economic recovery in China, and its average in the period was $3.78, down $0.04 year-on-year. The yen weakened against the U.S. dollar against the backdrop of a widening interest rate gap between Japan and U.S., and the average exchange rate in the period was JPY 143, down JPY 6 year-on-year. Next, please turn to page 12. Petroleum products margin index on the left improved by nearly JPY 3 year-on-year.
This improvement is attributable to the fact that the negative time lag, which was slightly more than JPY 1 in the previous fiscal year, became almost zero this fiscal year, and margins, excluding the time lag, have also remained firm. The paraxylene margin index on the right has improved slightly year-on-year as the impact of COVID-19 has eased. Page 14 and 15 provide an overview of financial results and operating income by segment. Details are explained in the waterfall chart from page 16. In the energy business, operating income excluding inventory valuation increased by JPY 236.6 billion year-on-year to JPY 160.3 billion. Petroleum products increased JPY 239 billion year-on-year. Sales volume, mainly for exports, were down JPY 13 billion year-on-year. Measure items and the breakdown of the JPY 252 billion increase in margins expenses are as follows.
A positive effect of the reversal of last year's negative time lag in petroleum products and exports was JPY 76 billion, and the real margin impact excluding the time lag was JPY 131 billion. This includes a JPY 69 billion improvement in petroleum products margins and JPY 62 billion improvement in petrochemicals margins. In addition, there was a gain on sales of land of about JPY 36 billion as a one-time factor for this term. The total impact of sales volume and external purchases improved by JPY 17 billion because of the reduction in troubles. High-performance materials decreased JPY 11 billion year-on-year. This was mainly due to the reversal of special factors recognized in the previous fiscal year. Electricity improved by JPY 7.3 billion, mainly due to improved selling prices.
Renewable energy posted impairment loss of JPY 6 billion for Saikai Enoshima, but the reversal of impairment losses in the previous fiscal year and foreign exchange gain from asset sales in the current fiscal year offset this one-time factor. The improvement from increased power generation capacity and other factors remained, resulting in an increase of JPY 1.3 billion. As noted by an asterisk, the JPY 2.6 billion loss for this period includes -JPY 6.1 billion in amortization of intangible assets. Next, please turn to page 17. Operating profit in the oil and natural gas E&P business decreased by JPY 18.1 billion year-on-year to JPY 77.5 billion. From the left, sales volume increased JPY 4.8 billion, mainly due to increased sales volume resulting from the completion of the expansion project and its start of shipment in Tangguh, Indonesia.
Resource prices were down JPY 30.1 billion due to lower oil and gas prices. Exchange expense and others were up JPY 7.2 billion, this includes impact of yen depreciation, as well as the one-time accounting effect associated with the acquisition of Japan Drilling Company. Please turn to page 18. Operating profit in the metals business was JPY 80.3 billion, down JPY 36.6 billion year-on-year. Sales volume of semiconductor materials and ICT materials decreased year-on-year, mainly due to inventory adjustments resulting from declining IT demand, this led to decreased profits.
In metals and recycling, while a temporary valuation gain of JPY 24.1 billion due to foreign exchange fluctuations recorded for the partial sale of interest in the Caserones copper mine, its profit declined, mainly due to the absence of profit associated with the sale of the copper mine and the valuation loss on the sale of partial shares of Pan Pacific Copper. The temporary valuation gains due to foreign exchange fluctuations associated with the partial sale of the Caserones copper mine is expected to be a gain of approximately JPY 10 billion upon completion of the liquidation of the affiliate and has already been factored into the full-year forecast. On page 19, I will explain the balance sheet and cash flow. First, cash flow on the right. Please look at the figures excluding IFRS 16 leases circled by the dotted line.
Cash flows from operating activities for cumulative nine months was a cash inflow of JPY 500.8 billion, with operating income excluding inventory valuation of JPY 335.6 billion and the depreciation and amortization of JPY 190.4 billion. The category of "Other" includes the effect of consumption tax refund related to the petroleum product subsidies explained in the first and the second quarters, but this was generally offset by seasonal factors such as the buildup of kerosene inventories and increased working capital due to the yen depreciation. After taking the impact of holidays into account, the real cash flow from operating activities was a cash inflow of JPY 416.4 billion. Cash flows from investing activities recorded a cash outflow of JPY 206.8 billion. The other category of JPY 82.6 billion includes proceeds from the partial sale of interest in the Caserones copper mine and sale of assets in the energy sector.
Free cash flow was JPY 294 billion or a cash inflow of JPY 209.6 billion, excluding the impact of holidays. Net cash flow, including dividend payments, was a net cash inflow of JPY 181.8 billion. As shown in the balance sheet on the left, net interest-bearing debt, excluding cash on hand, was JPY 2,519.9 billion, down JPY 240.2 billion from the end of the previous fiscal year, resulting in a net debt to equity ratio of 0.62x . That is all for my explanation. From page 20 onward, it's for your reference, and you can find information on assumptions, sensitivity, and earlier mentioned initiatives for the realization of energy transition. Thank you.