Japan traders' results a mixed bag as commodity rally offsets virus hit

Lawson

11/05/2021 06:54

By Yuka Obayashi
    TOKYO, May 11 (Reuters) - Japan's giant trading houses
reported mixed annual results, with Marubeni Corp  8002.T 
swinging to a better than expected profit and Sumitomo Corp
 8053.T  posting a record net loss amid the COVID-19 pandemic
and strong bulk commodity prices.
    Sweeping global lockdowns killed off global air travel in
the year ended March 31, suspended mining and energy projects
and cut consumer spending on clothes and restaurants, hurting
revenues for the trading companies whose portfolios span the
gamut of raw material markets among others.
    Some firms, however, benefited from a rally in iron ore and
copper which both scaled record highs this year amid tight
supplies and a robust demand outlook. Soaring grain prices,
mainly corn, also lent support.
 urn:newsml:reuters.com:*:nL1N2MU0A3 urn:newsml:reuters.com:*:nL1N2MX08B urn:newsml:reuters.com:*:nL1N2ML0AF
    Sumitomo reported the worst performance among the top-five
Japanese trading companies, clocking its biggest loss as the
pandemic suspended its Ambatovy nickel project in Madagascar for
one year, causing a hefty writedown.  urn:newsml:reuters.com:*:nL4N2LR0FL urn:newsml:reuters.com:*:nL1N2HS0PA
    Mitsubishi Corp's  8058.T  net profit slumped by 68% as
lower coking coal prices and an impairment on its convenience
store unit Lawson Inc  2651.T  eroded earnings. 
    "We had a very difficult year as our mainstay businesses
were deeply affected by the pandemic," CEO Takehiko Kakiuchi
said. 
    Mitsui & Co  8031.T  and Itochu Corp  8001.T  reported
smaller falls in profits - 14% and 20%, respectively - while
Marubeni booked a profit that exceeded its guidance and returned
the firm to profitability from a loss the previous year.
    The shares of the five firms have all gained this year, with
Marubeni's handily outpacing others with a 43% rise.
    
     
    Soaring iron ore prices helped Mitsui, Itochu and Marubeni
offset weak sales of oil, aircraft and train leasing, apparel
and food service items, with stronger grain prices also
bolstering Marubeni's results as profit of its U.S. grain
trading unit Gavilon surged.   
    Forecasts for this year were also mixed, with Itochu and
Mitsui predicting a 37% increase in net profit to a record 550
billion yen ($5.1 billion) and 460 billion yen, respectively,
while Mitsubishi's profit outlook was for a smaller 380 billion.
    Sumitomo forecast a quick turnaround to a 230 billion yen
profit from a 153 billion yen loss a year earlier, while
Marubeni's guidance of 230 billion yen represented a mere 2%
rise despite robust commodity prices.    
    "We've made a conservative forecast...as grain prices are
not likely to continue their rally like last year," Marubeni CEO
Masumi Kakinoki said.  urn:newsml:reuters.com:*:nL1N2MT0J2
($1 = 108.9400 yen)

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Japan trading houses shares    https://tmsnrt.rs/3uEdLaG
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 (Reporting by Yuka Obayashi; Editing by Muralikumar
Anantharaman)
 ((Yuka.Obayashi@thomsonreuters.com; +813-4563-2761;))