TOKYO: Japanese trading house Mitsubishi Corp hiked its net profit forecast on Thursday (02/02) for the current financial year by around a third, driven up as coking coal prices remain way above lows hit last year.
The revised forecast of 440 billion yen ($3.9 billion) is higher than a consensus estimate of 372 billion yen from 13 analysts polled by Thomson Reuters I/B/E/S.
The move comes after the trading house in November upgraded its profit guidance for the 2016/17 financial year, which ends in March.
Coking coal futures on the Singapore Commodity Exchange soared in the second half of last year as top commodity consumer China clamped down on local production as part of a campaign against pollution. They have since dropped by about 40 percent to around $170 a metric ton, but are still double what they were in mid-2016.
“Coking coal prices have not hit bottom yet and are likely to fall slightly further,” Kazuyuki Masu, chief financial officer of Japan’s Mitsubishi Corp told a news conference on Thursday. But he added that the company did not expect a sharp fall.
Mitsubishi’s profit forecast underscores a V-shaped recovery from last financial year when it booked its first-ever annual net loss due to massive writedowns on a slump in commodity prices.
Backed by strong earnings, Mitsubishi boosted its dividend forecast for the current year to 70 yen a share, against an earlier estimate of 60 yen and actual dividend of 50 yen a year earlier.
For the April-December period, Mitsubishi reported a 54.8-percent climb in net profit to 371.5 billion yen, as healthy profit from its metals business offset lower earnings from non-resource segments such as machinery and infrastructure.
Japanese trading houses such Mitsubishi and Mitsui & Co fulfil a quasi-national role by importing everything from oil to corn to sustain the country’s resource-poor economy.
