TOKYO Feb 8 Japanese trading house Mitsui & Co
Ltd on Wednesday raised its profit forecast for the
current financial year by 36 percent because of higher prices
for coking coal and iron ore.
The revised forecast of 300 billion yen ($2.67 billion) is
higher than a consensus profit estimate of 252 billion yen from
11 analysts polled by Thomson Reuters I/B/E/S.
A surge in coal prices and rising iron ore prices helped
boost its full-year profit estimate at its metals segment to 175
billion yen from an earlier prediction of 110 billion yen,
Mitsui chief financial officer Keigo Matsubara told a news
"An improvement in metals markets as well as cost cuts at
energy operations and solid income from the Independent Power
Producer business were behind the upward revision for the
full-year profit estimate," he said.
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 more than 40 percent to around
$165 a tonne, but are still double what they were in mid-2016.
Iron ore prices on the Dalian Commodity Exchange
have more than doubled from the end of March last year to around
640 yuan ($93) a tonne.
But Mitsui, which owns large iron ore assets, sees
uncertainties over metals prices going forward, including
impacts from the "America First" policies by the new U.S.
presidential administration and China's regulations on coal
mining, Matsubara said.
For the nine months through Dec. 1, the Japanese trading
firm reported a 71 percent jump in net profit to 230.33 billion
yen, propelled by robust profits from metals.
As a result of higher full-year profit outlook, Mitsui said
it would buy back up to 1.56 percent of its outstanding shares,
as an extra measure to increase shareholder return.
($1 = 112.2200 yen)
($1 = 6.8815 Chinese yuan renminbi)
(Reporting by Yuka Obayashi; Editing by Christian Schmollinger)