Japanese trading houses serve buffet of record profits
By Yuka Obayashi and Aaron Sheldrick
TOKYO, Nov. 5 (Reuters) – Japanese trading houses posted record profits and raised their forecasts for the full year, supported by soaring commodity prices and growing demand for machinery, shipping and food as the global economy began to shake off the effects of a pandemic. induced sag.
Like their global rivals in energy and mining, Itochu Corp, Mitsubishi Corp and other Japanese trading houses have benefited from the recovery that has pushed prices for items from coal to coffee to near record highs. historical.
Itochu said on Friday its net profit nearly doubled to a record 500.6 billion yen ($ 4.4 billion) in the six months to September 30, while Mitsubishi’s profit more than quadrupled. to hit a record 360.6 billion yen.
“A historic rise in iron ore prices and a resumption of our overseas operations, thanks to an upturn in economic activity in China, Europe and the United States, have contributed to our profits,” said Keita Ishii, President of Itochu.
Sogo shosha, as they are called in Japanese, have also delivered handsome returns to Berkshire Hathaway from US investor Warren Buffett after buying 5% of the shares in each of the five trading houses just over a year ago. year.
With dividends reinvested, those investments, valued at around $ 6.2 billion at the time, yielded between around a quarter in the case of Itochu and over 70% for Marubeni, according to data from Refinitiv Eikon.
All five trading companies raised their annual dividend forecasts, while Itochu also announced a new minimum dividend policy as it raised its annual forecast to another record 750 billion yen.
Mitsubishi nearly doubled its profit estimate for the full year to 740 billion yen, also a record, as it paid a dividend of 71 yen per share for the first half of the year.
Analysts had predicted annual profits of about 70 billion yen less for Itochu and Mitsubishi, according to data from Refinitiv.
Marubeni Corp, Mitsui & Co and Sumitomo Corp, the other three, also posted record results this week.
Recent falls in raw materials, slower growth in China and a bottleneck in global supply chains are likely to limit future earnings growth, executives said.
Mitsubishi’s forecast reflects the expected declines in coking coal prices, CFO Kazuyuki Masu said, adding that such high levels were unsustainable.
“We do not like the high volatility of natural resource prices (…) but it is important that we can take advantage of it when they recover,” he said. ($ 1 = 113,7800 yen)
(Reporting by Yuka Obayashi and Aaron Sheldrick; Editing by Clarence Fernandez)
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