REG-Mitsui & Co Ltd Consolidated Financial Results for the Year Ended March 31, 2021 <Origin Href="NewsSearch">IFRS</Origin>
30/04/2021 10:35
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Consolidated Financial Results for the Year Ended March 31, 2021 IFRS
This announcement is for our U.S.$5,000,000,000 Euro Medium Term Note
Programme.
Mitsui & Co., Ltd. announced its consolidated financial results for the
year ended March 31, 2021, based on International Financial Reporting
Standards (“IFRS”).
Mitsui & Co., Ltd. and subsidiaries
(Web Site : https://www.mitsui.com/jp/en/
(https://cts.businesswire.com/ct/CT?id=smartlink&url=https%3A%2F%2Fwww.mitsui.com%2Fjp%2Fen%2F&esheet=52421276&newsitemid=20210430005220&lan=en-US&anchor=https%3A%2F%2Fwww.mitsui.com%2Fjp%2Fen%2F&index=1&md5=ff7bd0eaf0b48ee0d3d2e4c382d9de57)
)
President and Chief Executive Officer : Kenichi Hori
Investor Relations Contacts : Masaya Inamuro, Investor Relations Division TEL
81-3-3285-1111
1. Consolidated financial results
(1) Consolidated operating results information for the year ended March 31,
2021
(from April 1, 2020 to March 31, 2021)
Years ended March 31,
2021 2020
% %
Revenue Millions of yen 8,010,235 (5.6) 8,484,130 (5.3)
Profit before income taxes Millions of yen 450,202 (15.7) 534,320 (8.6)
Profit for the year Millions of yen 350,381 (14.8) 411,312 (4.7)
Profit for the year attributable to owners of the parent Millions of yen 335,458 (14.3) 391,513 (5.5)
Comprehensive income for the year Millions of yen 996,046 － (261,856) －
Earnings per share attributable to owners of the parent, basic Yen 199.28 226.13
Earnings per share attributable to owners of the parent, diluted Yen 199.18 225.98
Profit ratio to equity attributable to owners of the parent % 8.0 9.7
Profit before income taxes to total assets % 3.7 4.5
Note:
1. Percentage figures for Revenue, Profit before income taxes, Profit for the
year, Profit for the year attributable to owners of the parent, and
Comprehensive income for the year represent changes from the previous year.
2. Share of profit (loss) of investments accounted for using the equity method
for the years ended March 31, 2021 and 2020 were ¥227,910 million and
¥269,232 million, respectively.
3. As described in the Note in Consolidated Statements of Income, the Company
has reconsidered the presentation of revenue from certain transactions, and
has restated revenues for the previous fiscal year.
(2) Consolidated financial position information
March 31, 2021 March 31, 2020
Total assets Millions of yen 12,515,845 11,806,292
Total equity Millions of yen 4,822,887 4,060,932
Total equity attributable to owners of the parent Millions of yen 4,570,420 3,817,677
Equity attributable to owners of the parent ratio % 36.5 32.3
Equity per share attributable to owners of the parent Yen 2,739.28 2,235.83
(3) Consolidated cash flow information
Years ended March 31,
2021 2020
Operating activities Millions of yen 772,696 526,376
Investing activities Millions of yen (322,474) (185,230)
Financing activities Millions of yen (486,963) (204,561)
Cash and cash equivalents at the end of the year Millions of yen 1,063,150 1,058,733
2. Dividend information
Years ended March 31, Year ending March 31, 2022 (Forecast)
2021 2020
Interim dividend per share Yen 40 40 45
Year-end dividend per share Yen 45 40 45
Annual dividend per share Yen 85 80 90
Annual dividend (total) Millions of yen 142,589 137,848
Consolidated dividend payout ratio % 42.7 35.4 32.4
Consolidated dividend on equity attributable to owners of the parent % 3.4 3.4
Note:
The amount of Annual dividend includes ¥331 million of dividend for the
shares related to the share-based compensation plan for employees.
3. Forecast of consolidated operating results for the year ending March 31,
2022 (from April 1, 2021 to March 31, 2022)
Year ending
March 31, 2022
Profit attributable to owners of the parent Millions of yen 460,000
Earnings per share attributable to owners of the parent, basic Yen 277.49
4. Others
(1) Increase/decrease of important subsidiaries during the period : None
(2) Changes in accounting policies and accounting estimate :
(ⅰ) Changes in accounting policies required by IFRS Yes
(ⅱ) Other changes None
(ⅲ) Changes in accounting estimates Yes
Note:
For further details please refer to p.28 “5. Consolidated Financial
Statements (7) Changes in Accounting Policies and Changes in Accounting
Estimates”.
(3) Number of shares:
March 31, 2021 March 31, 2020
Number of shares of common stock issued, including treasury stock 1,717,104,808 1,742,684,906
Number of shares of treasury stock 48,628,466 35,184,567
Year ended Year ended
March 31, 2021 March 31, 2020
Average number of shares of common stock outstanding 1,683,338,251 1,731,383,943
This earnings report is not subject to audit.
A Cautionary Note on Forward-Looking Statements:
This report contains forward-looking statements including those concerning
future performance of Mitsui & Co., Ltd. (“Mitsui”), and those
statements are based on Mitsui’s current assumptions, expectations and
beliefs in light of the information currently possessed by it. Various factors
may cause Mitsui’s actual results to be materially different from any future
performance expressed or implied by these forward-looking statements.
Therefore, these statements do not constitute a guarantee by Mitsui that such
future performance will be realized.
For key assumptions on which the statements concerning future performance are
based, please refer to (2)“Forecasts for the Year Ending March 31, 2022”
on p.16. For cautionary notes with respect to forward-looking statements,
please refer to the “Notice” section on p.20.
Supplementary materials and IR meetings on financial results:
Supplementary materials on financial results can be found on our web site.
We will hold an IR meeting on financial results for analysts and institutional
investors on May 7, 2021.
Contents of the meeting (English and Japanese) will be posted on our web site
immediately after the meeting.
Table of Contents
1. Qualitative Information
(1) Operating 2
Environment………………………………………………………………………………………
(2) Results of 3
Operations…………………………………………………………………………………………
(3) Financial Condition and Cash 11
Flows…………………………………………………………………………
2. Management Policies
(1) Progress with the Medium-term Management 16
Plan…………………………………………………………
(2) Forecasts for the Year Ending March 31, 16
2022………………………………………………………………
(3) Profit Distribution 19
Policy……………………………………………………………………………………
3. Basic Approach on Adoption of Accounting 19
Standards………………………………………………………
4. Other 20
Information………………………………………………………………………………………………
5. Consolidated Financial Statements
(1) Consolidated Statements of Financial 21
Position………………………………………………………………
(2) Consolidated Statements of Income and Comprehensive 23
Income……………………………………………
(3) Consolidated Statements of Changes in 25
Equity………………………………………………………………
(4) Consolidated Statements of Cash 26
Flows………………………………………………………………………
(5) Assumption for Going 27
Concern………………………………………………………………………………
(6) Basis of Consolidated Financial 27
Statements…………………………………………………………………
(7) Changes in Accounting Policies and Changes in Accounting 28
Estimates………………………………………
(8) Changes in 30
Presentation………………………………………………………………………………………
(9) Notes to Consolidated Financial 31
Statements…………………………………………………………………
1. Qualitative Information
As of the date of disclosure of this earnings report, the audit procedures for
consolidated financial statements have not been completed.
As used in this report, "Mitsui" and the "Company" refer to Mitsui & Co.,
Ltd. (Mitsui Bussan Kabushiki Kaisha), and "we", "us", "our" and the
"companies" are used to indicate Mitsui & Co., Ltd. and its subsidiaries,
unless otherwise indicated.
(1) Operating Environment
In the year ended March 31, 2021, the global economy declined rapidly and
significantly at the beginning of the fiscal year due to widespread restraints
on economic activities, which included curfew in many countries due to the
global spread of COVID-19. However, the overall economy subsequently rebounded
as economic activities resumed intermittently depending on the spread of
infection, and major economies such as the U.S. provided large-scale support
for households and businesses and implemented financial measures.
In the U.S., the economic recovery trend is expected to strengthen due to
large-scale economic measures by the new Biden administration and increasing
vaccinations. In Europe, there are concerns that the economic recovery may be
delayed as restraints on activities continue due to the resurgence in
infections and the slowing pace of vaccinations in major countries other than
the UK. In Japan, despite the recovery in exports, there are concerns about
the resurgence of COVID-19 cases and the impact of reduced automobile
production due to a global shortage of semiconductors. As a result, a
full-fledged recovery is not expected until after the summer when more
vaccinations are available. In China, in addition to an increase in exports,
investment and consumer spending are recovering and the economic growth rate
is expected to exceed the rate prior to the COVID-19 outbreak. In Russia and
Brazil, although exports and consumer spending continue to recover, Brazil
remains unable to stop the spread of infection and there are concerns that
this will hinder the economic recovery.
The global economic recovery is expected to be boosted by additional economic
measures in major countries as well as by widespread availability of
vaccinations. China, which controlled the spread of infection during the early
stage, is already on a recovery path, and the U.S., which is expanding
large-scale financial measures, is expected to return to the level before the
COVID-19 outbreak in the first half of the year. Then, Japan is expected to
return to the pre-COVID-19 level by the end of the year and Europe by next
year.
(2) Results of Operations
1) Analysis of Consolidated Income Statements
(Billions of Yen) Current Year Previous Year Change
(As restated)
Revenue 8,010.2 8,484.1 (473.9)
Gross Profit 811.5 839.4 (27.9)
Selling, general and administrative expenses (606.4) (584.9) (21.5)
Other Income (Expenses) Gain (Loss) on Securities and Other Investments—Net 7.9 25.1 (17.2)
Impairment Reversal (Loss) of Fixed Assets—Net (52.9) (110.8) +57.9
Gain (Loss) on Disposal or Sales of Fixed Assets—Net 4.6 9.5 (4.9)
Other Income (Expense)—Net (13.9) 38.5 (52.4)
Finance Income (Costs) Interest Income 19.9 41.4 (21.5)
Dividend Income 103.7 96.5 +7.2
Interest Expense (51.9) (89.6) +37.7
Share of Profit (Loss) of Investments Accounted for Using the Equity Method 227.9 269.2 (41.3)
Income Taxes (99.8) (123.0) +23.2
Profit for the Year 350.4 411.3 (60.9)
Profit for the Year Attributable to Owners of the Parent 335.5 391.5 (56.0)
* May not match with the total of items due to rounding off. The same shall
apply hereafter.
Revenue
Revenue for the year ended March 31, 2021 (“current year”) was ¥8,010.2
billion, a decrease of ¥473.9 billion from the year ended March 31, 2020
(“previous year”).
* We have presented the "revenue" and corresponding "cost" of certain
transactions in gross amounts beginning with the current fiscal year. Those
amounts for the previous fiscal year have also been restated to conform to the
presentation in the current fiscal year. This restatement has no impact on
gross profit, profit for the year attributable to owners of the parent, or
total equity attributable to owners of the parent. For further details please
refer to “5. Consolidated Financial Statements (2) Consolidated Statements
of Income and Comprehensive Income”.
Gross Profit
Mainly the Energy Segment, the Machinery & Infrastructure Segment, the
Lifestyle Segment recorded a decrease, while the Innovation & Corporate
Development Segment, Mineral & Metal Resources Segment and the Chemicals
Segment recorded an increase.
Selling, general and administrative expenses
Mainly the Lifestyle Segment and the Machinery & Infrastructure Segment
recorded a decline, while a cost increasing factor was recorded in the
Machinery & Infrastructure Segments. On the other hand, the Mineral &
Metal Resources Segment recorded increasing factors. The table provides a
breakdown of selling, general and administrative expenses.
Billions of Yen
Current Year Previous Year Change
Personnel …………………………………… ¥ (296.9) ¥ (298.8) ¥ +1.9
Welfare …………………………………… (9.2) (10.4) +1.2
Travel ……………………………………… (7.0) (27.5) +20.5
Entertainment ……………………………… (1.7) (6.1) +4.4
Communication …………………………… (46.4) (44.1) (2.3)
Rent ………………………………………… (8.7) (9.3) +0.6
Depreciation ………………………………… (36.7) (41.9) +5.2
Fees and Taxes ……………………………… (12.4) (13.3) +0.9
Loss Allowance …………………………… (80.6) (31.3) (49.3)
Others ……………………………………… (106.8) (102.2) (4.6)
Total ………………………………………… ¥ (606.4) ¥ (584.9) ¥ (21.5)
Other Income (Expenses)
Gain (Loss) on Securities and Other Investments—Net
For the current year, a gain on securities was recorded in the Machinery &
Infrastructure Segment, while an impairment loss was recorded in the Mineral
& Metal Resources Segment and the Machinery & Infrastructure Segment.
For the previous year, a gain on securities was recorded in the Machinery
& Infrastructure Segment, the Lifestyle Segment and the Innovation &
Corporate Development Segment.
Impairment Reversal (Loss) of Fixed Assets—Net
For the current year, mainly the Energy Segment and the Machinery &
Infrastructure Segment recorded an impairment loss on fixed assets, while the
Innovation & Corporate Development Segment recorded an impairment
reversal.
For the previous year, impairment losses on fixed assets were recorded in the
Energy Segment, the Lifestyle Segment and the Machinery & Infrastructure
Segment.
Other Income (Expense)—Net
For the current year, the impairment loss on loans in the Mineral & Metal
Resources Segment and Machinery & Infrastructure Segment, the foreign
exchange related loss in the Mineral & Metal Resources Segment, and the
cost related to asset retirement obligation in the Energy Segment were
recorded while insurance proceeds were recorded in the business in North
America in the Chemicals Segment.
For the previous year, the Chemicals Segment recorded insurance proceeds in
the business in North America, the Innovation & Corporate Development
Segment recorded a valuation profit on a derivative in relation to a put
option of an investment, and the Machinery & Infrastructure Segment
recorded insurance proceeds. Furthermore, a gain on the sales of property
management business was recorded in the Lifestyle Segment.
Finance Income (Costs)
Dividend Income
Mainly the Mineral & Metal Resources Segment recorded an increase, while
the Energy Segment recorded a decrease.
Share of Profit (Loss) of Investments Accounted for Using the Equity Method
Mainly the Energy Segment, the Lifestyle Segment and the Iron & Steel
Products Segment recorded a decrease, while the Mineral & Metal Resources
Segment and the Machinery & Infrastructure Segment recorded an increase.
Income Taxes
Income taxes for the current year were ¥99.8 billion, a reduction of ¥23.2
billion from ¥123.0 billion for the previous year. For the current year,
¥39.0 billion profit was recorded through the deferred tax assets
recognitions due to the reorganization of the U.S. subsidiaries in the Energy
Segment.
The effective tax rate for the current year was 22.2%, a decrease of 0.8
points from 23.0% for the previous year. Although there was an increase in tax
effective rate due to an impairment loss not recognizable for deferred tax in
the Mineral & Metal Resources Segment, there was a decrease in tax
effective rate due to a deferred tax assets recognition in the Energy Segment
and reversal of deferred tax liabilities on equity accounted investments due
to dividends from those investees. Considering these items, the tax effective
rate was lower than the previous year.
Profit for the Year Attributable to Owners of the Parent
Profit for the year attributable to owners of the parent was ¥335.5 billion,
a decrease of ¥56.0 billion from the previous year. For the impact of
COVID-19 pandemic, please refer "3) Impact of COVID-19 pandemic".
2) Operating Results by Operating Segment
A part of next-generation electric power business was transferred from the
Machinery & Infrastructure Segment to Energy Segment effective April 1,
2020. In accordance with the aforementioned changes, the operating segment
information for the previous year has been restated to conform to the current
year's presentation.
Iron & Steel Products Segment
(Billions of Yen) Current Year Previous Year Change
Profit for the year attributable to owners of the parent 2.1 4.7 (2.6)
Gross profit 21.2 24.6 (3.4)
Profit (loss) of equity method investments 4.3 13.1 (8.8)
Dividend income 1.4 1.9 (0.5)
Selling, general and administrative expenses (22.0) (27.2) +5.2
Others (2.8) (7.7) +4.9
Profit (loss) of equity method investments decreased mainly due to the
following factor:
- For the current year, Gestamp companies reported a decrease of ¥9.1 billion
mainly due to the lower operating time caused by lower automotive production,
the impact of foreign exchange fluctuations, and one-time cost related to the
structural transformation.
Mineral & Metal Resources Segment
(Billions of Yen) Current Year Previous Year Change
Profit for the year attributable to owners of the parent 179.9 183.3 (3.4)
Gross profit 251.2 226.0 +25.2
Profit (loss) of equity method investments 70.4 59.2 +11.2
Dividend income 59.8 25.2 +34.6
Selling, general and administrative expenses (72.3) (41.6) (30.7)
Others (129.2) (85.5) (43.7)
・ Gross profit increased mainly due to the following factors:
- Iron ore mining operations in Australia recorded an increase of ¥54.3
billion mainly due to higher sales prices.
- Coal mining operations in Australia recorded a decrease of ¥30.2 billion
mainly due to lower sales prices.
・ Profit (loss) of equity method investments increased mainly due to the
following factors:
- Iron ore mining operations in Australia recorded an increase of ¥10.8
billion mainly due to higher sales prices.
- Compañía Minera Doña Inés de Collahuasi SCM, a copper mining company in
Chile, recorded an increase of ¥6.1 billion mainly due to higher sales prices
and sales volume.
- Coal mining operations in Australia recorded a decrease of profit mainly due
to lower sales prices.
- Following the revisions to our various assumptions, impairment losses of
¥3.8 billion for the current year, and ¥5.1 billion for the previous year
were recorded for the Nacala Corridor rail & port infrastructure business
in Mozambique.
・ Dividend income increased mainly due to higher dividends from Vale S.A.
and iron ore mining operations in
Australia.
・ Selling, general and administrative expenses increased mainly due to the
following factors:
- Following the revisions to our various assumptions, impairment losses of
¥35.9 billion for the current year and ¥9.8 billion for the previous year
for doubtful debts were recorded regarding the Moatize mine business and
Nacala Corridor rail & port infrastructure business in Mozambique.
- For the current year, an impairment loss of ¥8.3 billion for doubtful debt
was recorded, based on the conclusion of share transfer agreement for the SCM
Minera Lumina Copper Chile, the project company for the Caserones Copper Mine.
・ In addition to the above, the following factors also affected results:
- Following the revisions to our various assumptions, impairment losses of
¥19.2 billion for the current year and ¥2.8 billion for the previous year
were recorded regarding the Moatize mine business and Nacala Corridor rail
& port infrastructure business in Mozambique.
- Coal mining operations in Australia recorded a decrease of ¥6.7 billion due
to foreign exchange related losses.
- Iron ore mining operations in Australia recorded a decrease of ¥6.0 billion
due to foreign exchange related losses.
Energy Segment
(Billions of Yen) Current Year Previous Year Change
Profit for the year attributable to owners of the parent 27.2 57.8 (30.6)
Gross profit 62.9 141.1 (78.2)
Profit (loss) of equity method investments 18.8 45.2 (26.4)
Dividend income 25.1 52.7 (27.6)
Selling, general and administrative expenses (47.2) (44.5) (2.7)
Others (32.4) (136.7) +104.3
・ Gross profit decreased mainly due to the following factors:
- Mitsui Oil Exploration Co., Ltd. recorded a decrease of ¥54.6 billion
mainly due to decline in production, and lower oil and gas prices.
- Business division at the Headquarters recorded a decrease mainly due to
impact of hurricane in LNG trading business.
- Mitsui E&P Italia A S.r.l recorded a decrease of ¥8.4 billion mainly
due to an increase in cost.
- MEP Texas Holdings LLC recorded a decrease of ¥4.9 billion mainly due to
lower oil and gas prices.
- Mitsui E&P USA LLC recorded a decrease of ¥4.3 billion mainly due to
lower oil and gas prices.
- AWE recorded an increase of ¥4.8 billion due to decrease of depreciation
cost.
・ Profit (loss) of equity method investment decreased mainly due to the
following factors:
- Japan Australia LNG(MIMI) Pty. Ltd recorded a decrease mainly due to lower
oil and gas prices.
- Mitsui E&P Mozambique Area 1 Limited recorded a decrease of ¥11.8
billion mainly due to the recognition of deferred tax assets in accordance
with the Final Investment Decision for the project in the previous year.
- Japan Arctic LNG recorded a decrease of ¥10.1 billion mainly due to
valuation loss on changes in oil price, foreign exchange and others.
- Mitsui & Co. LNG Investment USA, Inc. recorded an increase of ¥9.2
billion due to the commencement of commercial production in all three trains
at the Cameron LNG Project.
・ Dividends from six LNG projects (Sakhalin II, Qatargas 1, Abu Dhabi, Oman,
Qatargas 3 and Equatorial Guinea) were ¥24.3 billion in total, a decrease of
¥25.9 billion from the previous year.
・ In addition to the above, the following factors also affected results:
- For the current year, profit of ¥39.0 billion was recorded due to
recognition of deferred tax assets in accordance with transferring and
reorganizing the U.S. energy subsidiaries to MBK Energy Holdings USA Inc.
- For the current year, mainly due to lower oil price, Mitsui E&P Italia A
S.r.l recorded an impairment loss of ¥23.4 billion for its Tempa Rossa
project while impairment loss of ¥13.9 billion was recorded for the same
project in the previous year.
- For the current year, Mitsui E&P Australia recorded an impairment loss
of ¥17.3 billion mainly for its Meridian project mainly due to the update of
production profile, Toro/Ragnar and Libra exploration projects due to changes
in the future development plan, while impairment loss of ¥31.2 billion was
recorded for Greater Enfield project in the previous year.
- For the current year, Mitsui E&P Australia recorded a cost of ¥7.7
billion due to a revision of asset retirement obligation.
- For the previous year, MEP Texas Holdings recorded an impairment loss of
¥23.4 billion for its Eagle Ford shale oil and gas business.
- For the previous year, a subsidiary of Mitsui Oil Exploration Co., Ltd.
recorded an impairment loss of ¥4.3 billion for its offshore project in the
Gulf of Mexico.
Machinery & Infrastructure Segment
(Billions of Yen) Current Year Previous Year Change
Profit for the year attributable to owners of the parent 45.9 89.4 (43.5)
Gross profit 107.7 134.6 (26.9)
Profit (loss) of equity method investments 95.3 88.4 +6.9
Dividend income 3.9 5.1 (1.2)
Selling, general and administrative expenses (132.9) (133.4) +0.5
Others (28.1) (5.3) (22.8)
・ Gross profit decreased mainly due to the following factor:
- For the current year, the subsidiaries in relation to the railways,
construction & industrial machinery, and automobile business recorded a
decrease due to the effect of the COVID-19 pandemic.
・ Profit (loss) of equity method investments increased mainly due to the
following factors:
- A gain was recorded at an automobile company in Canada due to good sales
results.
- A gain was recorded at a construction & mining machinery company in
Australia due to good sales results.
- Mitsui & Co. LNG Investment USA, Inc. recorded an increase of ¥4.0
billion due to the commencement of commercial production in all three trains
at the Cameron LNG Project.
- FPSO/FSO leasing companies recorded an increase of ¥3.8 billion due to the
absence of refinancing and other costs in the previous year.
- Offshore supporting vessels business was improved due to the absence of
impairment of assets in the previous year.
- For the current year, a portion of impairment loss of ¥4.7 billion for
equity investments was recorded following current estimates, based on status
to date, and the final valuation of termination payments for early termination
of the franchise agreements in relation to passenger rail business with the
Department of Transport, UK (“The current estimate in the passenger rail
franchise business in the UK”).
- Investments in gas distribution companies in Brazil recorded a decrease of
¥4.6 billion because of the depreciation of the Brazilian Real and tariff
reduction as prior year adjustment for the current year, while the refund of
service tax payments through arbitrations led to a transient increase in the
previous year.
- Following the revisions to our various assumptions, impairment losses of
¥0.9 billion for the current year, and ¥1.3 billion for the previous year
were recorded for the Nacala Corridor rail & port infrastructure business
in Mozambique.
・ Selling, general and administrative expenses decreased, while there was
the following increase factors:
- Following the revisions to our various assumptions, impairment losses of
¥9.0 billion for the current year and ¥2.4 billion for the previous year for
doubtful debts were recorded regarding the Moatize mine business and Nacala
Corridor rail & port infrastructure business in Mozambique.
- For the current year, a loss allowance for doubtful debt of ¥4.9 billion
was recorded based on the current estimate in the passenger rail franchise
business in the UK.
・ In addition to the above, the following factors also affected results:
- For the current year, ¥9.3 billion impairment loss was recorded in the
rolling stock leasing business.
- Following the revisions to our various assumptions, impairment losses of
¥4.8 billion for the current year and ¥0.7 billion for the previous year
were recorded regarding the Moatize mine business and Nacala Corridor rail
& port infrastructure business in Mozambique.
- For the previous year, Mitsui Bussan Aerospace Co., Ltd. reported an other
income and expense of ¥4.0 billion mainly due to insurance proceeds.
- For the current year, a provision for loss on guarantee of ¥1.5 billion was
recorded based on the current estimate in the passenger rail franchise
business in the UK.
- Gains on sale of the IPP business in North America were recorded both in the
current and previous year.
- For the previous year, the overseas railway business recorded an impairment
loss of fixed asset.
Chemicals Segment
(Billions of Yen) Current Year Previous Year Change
Profit for the year attributable to owners of the parent 43.5 22.3 +21.2
Gross profit 124.9 116.8 +8.1
Profit (loss) of equity method investments 11.3 11.5 (0.2)
Dividend income 3.0 2.7 +0.3
Selling, general and administrative expenses (95.5) (101.9) +6.4
Others (0.2) (6.8) +6.6
・ Gross profit increased mainly due to the following factor:
- An increase of ¥3.1 billion was recorded due to price increase and cost
reduction of main products in Novus International, Inc.
・ In addition to the above, the following factor also affected results:
- Insurance proceeds were recorded in the business in North America both for
the current and previous year.
Lifestyle Segment
(Billions of Yen) Current Year Previous Year Change
Profit for the year attributable to owners of the parent 12.7 32.0 (19.3)
Gross profit 133.8 134.9 (1.1)
Profit (loss) of equity method investments 13.4 35.0 (21.6)
Dividend income 5.6 4.2 +1.4
Selling, general and administrative expenses (129.4) (139.3) +9.9
Others (10.7) (2.8) (7.9)
・ Gross profit decreased mainly due to the following factors:
- For the current year, subsidiaries, whose businesses are fashion, food and
distribution, recorded a decrease of profit due to the closure of stores and
lower demand for commercial ingredients for the food service industry caused
by the state of emergency and curfew.
- For the current year, reclassification from a consolidated subsidiary for
the fashion & textile businesses in Asia to an equity method investee
caused a ¥4.8 billion decrease.
- Drug development in the life science and healthcare fund invested through
MBK Pharma Partnering Inc recorded a ¥3.8 billion gain mainly from the
valuation of fair value for the current year due to the progress on drug
development, and a ¥2.4 billion loss mainly due to the suspension of drug
development for the previous year.
- For the current year, United Grain Corporation of Oregon which runs an
origination and merchandising of grain business in the U.S. West Coast
recorded an increase of ¥5.0 billion mainly due to strong wheat and soybean
sales.
- For the current year, PRIFOODS CO., LTD. which runs a production, processing
and sales of broilers recorded an increase of ¥3.2 billion mainly due to an
increase in sales volume with stay-at-homes orders.
・ Profit (loss) of equity method investment decreased mainly due to the
following factors:
- For the current year, equity method investees, whose businesses are food,
fashion, and services, recorded a decrease of profit due to curfew and
self-restraint.
- For the current year, IHH Healthcare Berhad recorded a decrease of ¥3.4
billion mainly because of decline in operation rate due to lower demand for
medical tourism and from patients with minor illnesses caused by the effect of
the COVID-19 pandemic, and impairment of goodwill over subsidiary in India.
- For the previous year, International Columbia U.S. LLC divested Columbia
Asia Healthcare Pte. Ltd and a capital gain of ¥13.0 billion from this
transaction was recorded.
・ Selling, general and administrative expenses decreased mainly due to the
following factor:
- For the current year, reclassification from a consolidated subsidiary for
the fashion & textile businesses in Asia to an equity method investee
caused a ¥4.3 billion decrease.
・ In addition to the above, the following factors also affected results:
- For the previous year, there was a ¥12.5 billion decline in tax burden in
relation to income taxes recognized as other comprehensive income
corresponding to sales of financial assets measured at FVTOCI, including the
share of Recruit Holdings Co., Ltd.
- For the previous year, a capital gain from the sales of Sogo Medical
Holdings Co., Ltd. and the reversal of deferred tax liability for the retained
earnings, totaling ¥8.7 billion, were recorded.
- For the previous year, Mitsui & Co. Foresight recorded a gain on the
sales of the property management business.
- For the previous year, a capital gain from the partial sale of RareJob, Inc.
was recorded.
- For the previous year, an impairment loss on fixed assets of ¥14.0 billion
was recorded due to a decline of the fair value of its farmland and others
mainly caused by a depreciation of the Brazilian real against the U.S. dollar
in XINGU AGRI AG conducting a production business of agricultural products in
Brazil.
- For the previous year, an impairment loss of fixed assets of ¥6.8 billion
was recorded mainly due to a partially poor business performance in
Accountable Healthcare Holdings Corporation, which conducts healthcare
staffing in the U.S.
Innovation & Corporate Development Segment
(Billions of Yen) Current Year Previous Year Change
Profit for the year attributable to owners of the parent 50.2 14.6 +35.6
Gross profit 107.0 60.1 +46.9
Profit (loss) of equity method investments 13.9 17.0 (3.1)
Dividend income 3.8 3.3 +0.5
Selling, general and administrative expenses (63.7) (64.5) +0.8
Others (10.8) (1.3) (9.5)
・ Gross profit increased mainly due to the following factors:
- For the current year, a ¥13.1 billion gain on the sales was recorded at a
holding company as a result of sales of its entire shareholding in OSIsoft
LLC.
- For the previous year, ¥6.5 billion loss was recorded due to the valuation
of fair value on shares in Hutchison China MediTech Ltd., while for the
current year, ¥5.6 billion gain was recorded due to the valuation and sales
of the shares.
- For the current year, an increase of ¥5.1 billion was recorded mainly due
to good results of energy trading in Mitsui Bussan Commodities Ltd.
- For the current year, an increase of ¥5.0 billion was recorded mainly due
to good results of precious metal trading at a business division at the
Headquarters.
- For the previous year, MGI Global Fund L.P. recorded ¥1.0 billion loss for
the valuation of shares, while for the current year, it recorded ¥2.8 billion
gain for the valuation and sales of shares mainly associated with the IPO of
QD Laser, Inc.
- For the current year, a gain of ¥3.3 billion in the valuation of fair value
was recorded associated with the IPO of shares held through G2VP, LLC.
- An increase of ¥2.7 billion was caused from the combined effect of the loss
on the valuation and sales of the shares in Mercari, Inc. recognized for the
previous year, and the profit on the sales of it's entire shareholding for the
current year.
・ In addition to the above, the following factors also affected results:
- For the current year, ¥4.3 billion of reversal of impairment loss on land
was recorded.
- For the previous year, a gain on the sales of equity stake in real estate
business in Singapore was recorded.
- For the previous year, a valuation profit on the derivative of ¥4.4 billion
was recorded in relation to a put option on an investment.
3) Impact of COVID-19 pandemic
For the current year, the Machinery & Infrastructure Segment, which
suffered from lower demand in the passenger rail franchise business and
locomotive leasing business, and the Iron & Steel Products Segment, which
suffered from lower plant utilization rates, recorded a decrease of profit due
to the COVID-19 pandemic and lockdown or travel bans in various regions and
countries. Also, the Lifestyle Segment recorded a decrease of profit due to
lower demand for commercial ingredients for the food service industry and
fashion-related products amid a continuing trend in many countries to refrain
from unnecessary going out, as well as a decline in occupancy rates in the
hospital business due to a decrease in medical tourism and patients with minor
illnesses. Additionally, the Energy Segment recorded a decrease of profit due
to lower oil and gas prices caused by lower demand mainly for transportation
fuels.
On the other hand, the Innovation & Corporate Development Segment recorded
an increase of profits due to FVTPL gain in relation to the stock market
recovered mainly by economic support measures in each country, in addition to
the steady capture of demands related to stay-at-home orders and IT
infrastructure in the digital security business and in the TV shopping
business. Also, the automobile-related business in the Machinery &
Infrastructure Segment, recorded an increase of profit as a result of the
recovery of demand in the second half of the current year, mainly in North
America, amid a shift in the means of transportation from public
transportation to private cars.
As mentioned above, there were some factors that contributed to the
improvement in our results, but the impact of the decrease in profit due to
factors that worsened our results was significant, thus our results were lower
than the previous year due to the COVID-19 pandemic.
(3) Financial Condition and Cash Flows
1) Financial Condition
(Billions of yen) March 31, 2021 March 31, 2020 Change
Total Assets 12,515.8 11,806.3 +709.5
Current Assets 4,207.5 4,124.4 +83.1
Non-current Assets 8,308.4 7,681.9 +626.5
Current Liabilities 2,701.7 2,701.1 +0.6
Non-current Liabilities 4,991.2 5,044.3 (53.1)
Net Interest-bearing Debt 3,299.8 3,486.7 (186.9)
Total Equity Attributable to Owners of the Parent 4,570.4 3,817.7 +752.7
Net Debt-to-Equity Ratio (times) 0.72 0.91 (0.19)
Assets
Current Assets:
・ Cash and cash equivalents increased by ¥4.5 billion.
・ Trade and other receivables increased by ¥189.5 billion, mainly due to
following factors:
- An increase in trade receivable by ¥147.3 billion due to favorable market
conditions for the Mineral & Metal Resources Segment, and an increase in
trading volume in the Energy Segment, and due to both favorable market
conditions and the increase in trading volume in the Chemicals Segment; and
- An increase of ¥49.8 billion in current portion of long-term receivables of
Mineral & Metal Resources Segment, mainly due to reclassification to
current maturities.
・ Other financial assets declined by ¥132.9 billion, mainly due to market
volatility and decreases in trading volume of derivative trading in the Energy
Segment and the Innovation & Corporate Development Segment.
・ Inventories increased by ¥61.3 billion, mainly due to favorable market
condition and increases in trading volume in the Mineral & Metal Resources
Segment, the Energy Segment and the Lifestyle Segment.
Non-current Assets:
・ Investments accounted for using the equity method increased by ¥163.0
billion, mainly due to the following factors:
- An increase of ¥108.7 billion resulting from foreign currency exchange
fluctuations;
- An increase of ¥36.3 billion due to an investment in Mitsui E&P
Mozambique Area 1 Limited, which participates in the Mozambique LNG Project;
- An increase of ¥227.9 billion corresponding to the profit of equity method
investments for the current year,
despite a decline of ¥194.8 billion due to dividends from equity accounted
investees;
- An increase due to an investment in Japan Arctic LNG B.V., which
participates in the Arctic LNG 2 Project in Russia;
- An increase of ¥10.5 billion due to an investment in Caitan S.p.A, which
participate in desalination and conveyance projects for BHP Spence copper mine
in Chile; and
- A decline in equity method investment in Mitsui & Co. Cameron LNG
Investment LLC as result of conversion of equity method investment into
shareholder loans by ¥25.9 billion.
・ Other investments increased by ¥471.2 billion, mainly due to the
following factor:
- As a result of higher share prices, fair value on financial assets measured
at FVTOCI increased by ¥472.8 billion.
・ Trade and other receivables declined by ¥116.4 billion, mainly due to the
following factors:
- An impairment of ¥66.9 billion for doubtful debt regarding the Moatize mine
business and Nacala Corridor rail & port infrastructure businesses in
Mozambique;
- A decline of ¥49.8 billion in current portion of long-term receivables of
Mineral & Metal Resources Segment, mainly due to reclassification to
current maturities; and
- An increase in receivable balance from Mitsui & Co. Cameron LNG
Investment LLC as result of conversion of equity method investment into
shareholder loans by ¥25.9 billion.
・ Property, plant and equipment increased by ¥53.7 billion, mainly due to
the following factors:
- An increase of ¥94.3 billion (including foreign exchange translation profit
of ¥77.4 billion) at iron ore mining operations in Australia;
- An increase of ¥31.5 billion (including foreign exchange translation profit
of ¥16.8 billion) at coal mining operations in Australia; and
- A decline of ¥74.3 billion (including foreign exchange translation profit
of ¥19.0 billion) at the oil and gas projects (*), mainly due to impairment
losses at Mitsui E&P Italia A S.r.l and Mitsui E&P Australia.
(*) including the U.S. shale gas and oil projects from the current year.
・ Investment property increased by ¥23.0 billion, mainly due to an increase
in the Innovation & Corporate Development Segment.
・ Deferred tax assets increased by ¥53.2 billion, mainly due to following
factors:
- Recognition of deferred tax assets by ¥39.0 billion in accordance with
transferring and reorganizing the U.S. energy subsidiaries to MBK Energy
Holdings USA Inc.; and
- Recognition of deferred tax assets related to losses from valuation of fixed
assets and impact of exchange rate at Mitsui E&P Australia were main
reasons for increase by ¥19.2 billion.
Liabilities
Current Liabilities:
・ Short-term debt increased by ¥3.0 billion. Furthermore, the current
portion of long-term debt increased by
¥51.0 billion, mainly due to a reclassification to current maturities.
・ Trade and other payables increased by ¥176.8 billion, corresponding to
the increase in trade and other
receivables.
・ Other financial liabilities declined by ¥255.7 billion, mainly due to
corresponding decline in other financial
assets and payments on account payable at the integrated development project
in the 2, Otemachi 1-Chome District.
Non-current Liabilities:
・ Long-term debt, less the current portion, declined by ¥233.9 billion.
・ Provisions increased by ¥33.2 billion mainly due to increase in asset
retirement obligations in Mitsui E&P Australia and Mitsui Coal Holdings.
Total Equity Attributable to Owners of the Parent
・ Retained earnings increased by ¥185.5 billion.
・ Other components of equity increased by ¥597.7 billion, mainly due to the
following factors:
- Financial assets measured at FVTOCI increased by ¥359.7 billion; and
- Foreign currency translation adjustments increased by ¥258.9 billion,
mainly reflecting the appreciation of the Australian dollar, and the U.S.
dollar against the Japanese Yen, even though the Brazilian real has
depreciated.
・ Treasury stock which is a subtraction item in shareholders' equity
increased by ¥24.4 billion, mainly due to the shares buy-back for ¥71.3
billion(including a buy-back for share-based compensation plan for employees
of ¥6.9 billion), despite cancellation of the stock for ¥46.7 billion.
2) Cash Flows
(Billions of yen) Current Year Previous Year Change
Cash flows from operating activities 772.7 526.4 +246.3
Cash flows from investing activities (322.5) (185.2) (137.3)
Free cash flow 450.2 341.2 +109.0
Cash flows from financing activities (487.0) (204.6) (282.4)
Effect of exchange rate changes on cash and cash equivalents etc. 41.2 (34.0) +75.2
Change in cash and cash equivalents 4.4 102.6 (98.2)
Cash Flows from Operating Activities
(Billions of Yen) Current Year Previous Year Change
Cash flows from operating activities a 772.7 526.4 +246.3
Cash flows from change in working capital b 56.2 (95.5) +151.7
Repayments of lease liabilities c (58.4) (60.9) +2.5
Core operating cash flow a-b+c 658.1 561.0 +97.1
・ Net cash from an increase or a decrease in working capital, or changes in
operating assets and liabilities for the current year was ¥56.2 billion of
net cash inflow. Repayments of lease liabilities for the current year was
¥58.4 billion of cash outflow. Core operating cash flow, which equaled cash
flows from operating activities without both cash flows from changes in
working capital and repayments of lease liabilities, for the current year
amounted to ¥658.1 billion. From the current year, in order to reflect a
regular cash generation output from operating activities more appropriately,
repayments of lease liabilities have been deducted. In conformity with this
change, core operating cash flow for the previous year has been restated.
- Net cash inflow from dividend income, including dividends received from
equity accounted investees, for the current year totaled ¥307.8 billion, an
increase of ¥8.6 billion from ¥299.2 billion for the previous year; and
- Depreciation and amortization for the current year was ¥273.6 billion, an
increase of ¥17.5 billion from ¥256.1 billion for the previous year.
The following table shows core operating cash flow by operating segment.
(Billions of Yen) Current Year Previous Year Change
Iron & Steel Products 2.0 2.2 (0.2)
Mineral & Metal Resources 308.1 243.7 +64.4
Energy 123.2 206.5 (83.3)
Machinery & Infrastructure 78.7 86.8 (8.1)
Chemicals 62.5 35.8 +26.7
Lifestyle 19.8 20.5 (0.7)
Innovation & Corporate Development 55.1 3.9 +51.2
All Other and Adjustments and Eliminations 8.7 (38.4) +47.1
Consolidated Total 658.1 561.0 +97.1
Cash Flows from Investing Activities
・ Net cash outflows that corresponded to investments in equity accounted
investees (net of sales of investments in equity accounted investees) were
¥56.5 billion, mainly due to the following factors:
- An investment in Mitsui E&P Mozambique Area 1 Limited, which
participates in the Mozambique LNG
Project, for ¥36.3 billion;
- An investment in Japan Arctic LNG B.V, which participates in the Arctic LNG
2 Project in Russia;
- An investment in Caitan S.p.A, which participates in desalination and
conveyance projects for BHP
Spence copper mine in Chile, for ¥10.5 billion; and
- A sale of the IPP business in North America.
・ Net cash inflows that corresponded to other investments (net of sales and
maturities of other investments) were ¥9.5 billion, mainly due to the
following factors:
- A sale of investment in San-ei Sucrochemical Co., Ltd., for ¥13.5 billion;
and
- Investments in power generating businesses for ¥10.9 billion.
・ Net cash inflows that corresponded to increase in loan receivable (net of
collections of loan receivable) were ¥14.2 billion, despite of execution of
loan to Japan Arctic LNG B.V.
・ Net cash outflows that corresponded to purchases of property, plant, and
equipment (net of sales of those assets) were ¥206.4 billion, mainly due to
the following factors:
- An expenditure for iron ore mining operations in Australia for ¥39.3
billion;
- An expenditure for the oil and gas projects for ¥37.0 billion;
- An expenditure for the integrated development project in the 2, Otemachi
1-Chome District for ¥36.9 billion;
- An expenditure for coal mining operations in Australia for ¥19.6 billion;
and
- An expenditure for power generating businesses for ¥18.2 billion.
・ Net cash outflows that corresponded to purchases of investment property
(net of sales of those assets) were ¥53.1 billion, mainly due to an
expenditure for the integrated development project in the 2, Otemachi 1-Chome
District for ¥37.8 billion.
Cash Flows from Financing Activities
・ Net cash outflows from net change in short-term debt were ¥26.5 billion,
net cash outflows from net change in long-term debt were ¥177.0 billion, and
cash outflow from repayments of lease liabilities were ¥58.4 billion.
・ The cash outflow from the purchases of treasury stock was ¥71.3 billion
(including a buy-back for share-based compensation plan for employees of ¥6.9
billion).
・ The cash outflow from payments of cash dividends was ¥135.5 billion.
・ The cash outflow from transactions with non-controlling interest
shareholders was ¥18.2 billion, mainly due to an additional acquisition of a
stake in Collahuasi copper mine in Chile.
2. Management Policies
(1) Progress with the Medium-term Management Plan
Reference is made to our Presentation Material of Financial Results for the
year ended March 31, 2021 "Review of Medium-term Management Plan 2023 and plan
for FY Ending March 2022" on our web site. Reference is also made to
"Medium-term Management Plan 2023 Transform and Grow" released on May 1, 2020.
(2) Forecasts for the Year Ending March 31, 2022
1) Forecasts for the year ending March 31, 2022
Assumption Forecast Result
Exchange rate (JPY/USD) 105.00 105.94
Crude oil (JCC) $61/bbl $43/bbl
Consolidated oil price $59/bbl $46/bbl
(Billions of yen) March 31, March 31, Change Description
2022 2021
Forecast Result
Gross profit 820.0 811.5 +8.5
Selling, general and administrative expenses (590.0) (606.4) +16.4 Reversal effects of impairment losses
Gain (loss) on investments, fixed assets and other 0 (54.4) +54.4 Reversal effects of impairment losses
Interest expenses (30.0) (32.1) +2.1
Dividend income 120.0 103.7 +16.3 Mineral & Metal Resources Segment
Energy Segment
Profit (loss) of equity method investments 280.0 227.9 +52.1 Machinery & Infrastructure Segment
Lifestyle Segment
Iron & Steel Products Segment
Profit before income taxes 600.0 450.2 +149.8
Income taxes (130.0) (99.8) (30.2)
Non-controlling interests (10.0) (14.9) +4.9
Profit for the year attributable to owners of the parent 460.0 335.5 +124.5
Depreciation and amortization 300.0 273.6 +26.4
Core operating cash flow 680.0 658.1 +21.9
・ The forecast for the fiscal year ending March 31, 2022 is based on the
assumption that the global economy will head for recovery, although there are
disparities among countries and regions. Business performance is expected to
rebound due to absence of the impairment losses recorded in the year ended
March 31, 2021 in the Mineral & Metal Resources Segment, the Machinery
& Infrastructure Segment and the Energy Segment. In addition, it is also
expected that there will be a recovery in the Iron & Steel Products
Segment and the Lifestyle Segment, which experienced a decline in demand and
capacity utilization due to the COVID-19 pandemic.
・ We assume foreign exchange rates for the year ending March 31, 2022 will
be ¥105/US$, ¥80/AU$ and ¥19/BRL, while average foreign exchange rates for
the year ended March 31, 2021 were ¥105.94/US$, ¥76.71/AU$ and ¥19.46/BRL.
Also, we assume the annual average consolidated oil price applicable to our
financial results for the year ending March 31, 2022 will be US$59/barrel, up
US$13/barrel from the previous year, based on the assumption that the crude
oil price (JCC) will average US$61/barrel throughout the year ending March 31,
2022.
The forecast for profit for the year attributable to owners of the parent by
operating segment compared to the previous year is as follows:
(Billions of yen) Year ending Year ended Change Description
March 31, 2022 March 31, 2021
Iron & Steel Products 10.0 2.1 +7.9 Reversal effects of COVID-19 impact
Mineral & Metal Resources 260.0 179.9 +80.1 Reversal effects of impairment losses
Energy 50.0 27.2 +22.8 Higher oil and gas price
Reversal effects of impairment losses
Machinery & Infrastructure 80.0 45.9 +34.1 Reversal effects of COVID-19 impact
Chemicals 40.0 43.5 (3.5)
Lifestyle 20.0 12.7 +7.3 Reversal effects of COVID-19 impact
Innovation & Corporate Development 30.0 50.2 (20.2) Reversal effects of FVTPL profit
Others / Adjustments (30.0) (26.0) (4.0)
and Eliminations
Consolidated Total 460.0 335.5 +124.5
The forecast for core operating cash flow by operating segment compared to the
previous year is as follows:
(Billions of yen) Year ending Year ended Change Description
March 31, 2022 March 31, 2021
Iron & Steel Products 5.0 2.0 +3.0
Mineral & Metal Resources 290.0 308.1 (18.1) AUD appreciation, tax payment
Energy 170.0 123.2 +46.8 Higher oil and gas price
Machinery & Infrastructure 100.0 78.7 +21.3 Reversal effects of COVID-19 impact
Chemicals 55.0 62.5 (7.5)
Lifestyle 30.0 19.8 +10.2 Reversal effects of COVID-19 impact
Innovation & Corporate Development 30.0 55.1 (25.1) Reversal effects of FVTPL profit
Others / Adjustments 0.0 8.7 (8.7)
and Eliminations
Consolidated Total 680.0 658.1 +21.9
2) Key commodity prices and other parameters for the year ending March 31,
2022
The table below shows assumptions for key commodity prices and foreign
exchange rates for the forecast for the year ending March 31, 2022. The
effects of movements on each commodity price and foreign exchange rates on
profit for the year attributable to owners of the parent are included in the
table.
Impact on profit for the year attributable to owners of the parent March 2022 March 2021
for the year ending March 31, 2022 Assumption Result
Commodity Crude Oil/JCC - 61 43
Consolidated Oil Price (*1) ¥2.5 bn (US$1/bbl) 59 4
6
U.S. Natural Gas (*2) ¥1.1 bn (US$0.1/mmBtu) 2.74 2
.
1
3
(
*
3
)
Iron Ore (*4) ¥2.2 bn (US$1/ton) (*5) ← 1
2
8
(
*
6
)
Coal Coking ¥0.4 bn (US$1/ton) (*5) 119 (*7)
Thermal ¥0.1 bn (US$1/ton) (*5) 69 (*7)
Copper (*8) ¥0.7 bn (US$100/ton) 7,650 6,169 (*9)
Forex (*10) USD ¥2.6 bn (¥1/USD) 105.00 105.94
AUD ¥2.4 bn (¥1/AUD) 80.00 7
6
.
7
1
BRL ¥0.2 bn (¥1/BRL) 19.00 1
9
.
4
6
(*1) As the crude oil price affects our consolidated results with a 0-6 month
time lag, the effect of crude oil prices on consolidated results is estimated
as the Consolidated Oil Price, which reflects this lag. For the year ending
March 2022, we have assumed that there is a 4-6 month lag for approx. 35%, a
1-3 month lag for approx. 60%, and no lag for approx. 5%. The above
sensitivities show annual impact of changes in consolidated oil price.
(*2) As Mitsui has very limited exposure to U.S. natural gas sold at Henry Hub
(HH), the above sensitivities show annual impact of changes in the weighted
average sale price.
(*3) U.S. gas figures for the year ended March 2021 are the Henry Hub Natural
Gas Futures average daily prompt month closing prices traded on NYMEX during
January to December 2020.
(*4) The effect of dividend income from Vale S.A. has not been included.
(*5) Iron ore and coal price assumptions are not disclosed.
(*6) Iron ore results figures for the year ended March 2021 are the daily
average (reference price) spot indicated price (Fe 62% CFR North China)
recorded in several industry trade magazines from April 2020 to March 2021.
(*7) Coal results figures for the year ended March 2021 are the quarterly
average prices of representative coal brands in Japan (US$/MT).
(*8) As the copper price affects our consolidated results with a 3-month time
lag, the above sensitivities show the annual impact of US$100/ton change in
averages of the LME monthly average cash settlement prices for the period
March to December 2021.
(*9) Copper results figures for the year ended March 2021 are the averages of
the LME monthly average cash settlement prices for the period January to
December 2020.
(*10) Impact of currency fluctuations on reported profit for the year of
overseas subsidiaries and equity accounted investees denominated in their
respective functional currencies and the impact of dividend received from
major foreign investees. Depreciation of the yen has the effect of increasing
profit for the year through the conversion of profit (denominated in
functional currencies) into yen. In the overseas subsidiaries and equity
accounted investees where the sales contract is in USD, the impact of currency
fluctuations between the USD and the functional currencies (AUD and BRL) and
the impact of currency hedging are not included.
(3) Profit Distribution Policy
Our profit distribution policy is as follows:
・ In order to increase corporate value and maximize shareholder value, we
seek to maintain an optimal balance between (a) meeting investment demand in
our core and growth areas through re-investments of our retained earnings, and
(b) directly providing returns to shareholders by paying out cash dividends.
・ In addition to the above, share buy-backs aimed at improving capital
efficiency should be decided in a prompt and flexible manner as needed
concerning buy-back timing and amount by taking into consideration the
business environment such as, future investment activity trends, free cash
flow and interest-bearing debt levels, and return on equity.
For the current year, we conducted a buy-back program of ¥71.3 billion yen
(including for share-based compensation plan for employees of ¥6.9 billion).
On April 27, 2021, we announced that we completed the buy-back program
announced on February 24, 2021, and we had purchased ¥24.6 billion yen from
April 1 to April 26, 2021. Furthermore, on April 30, 2021, we announced a new
buy-back program up to ¥50.0 billion of our own shares from May 6, 2021 to
June 23, 2021. For details, please refer to the "Notification of Stock
Repurchase" on our website.
The annual dividend for the year ended March 31, 2021 will be ¥85 per share
(including an interim dividend of ¥40 per share, an increase of ¥5 from the
previous year), an upward revision of ¥5 from the previous forecast, taking
into consideration the core operating cash flow and net income (attributable
to owners of the parent) in the consolidated financial results, as well as the
stability and continuity of dividend payments.
Under the Medium-term management plan announced on May 1, 2020, the minimum
annual dividend per share was set at ¥80 based on the level of core operating
cash flow, which was judged to be stable and sustainable. Considering the
improvement of cash flow generation ability, we decided to upwardly revise the
minimum annual by dividend ¥10 per share, setting the minimum at ¥90 per
share.
.
In addition, we will continue to flexibly and strategically allocate funds for
investment in growth and additional shareholder returns (additional dividends
and share buybacks) according to the business performance during the
Medium-term business plan period.
For the fiscal year ending March 31, 2022, we plan to pay an annual dividend
of ¥90 per share (an increase of ¥5 from the previous fiscal year) .
3. Basic Approach on Adoption of Accounting Standards
International Financial Reporting Standards was adopted on our annual
securities report under the Financial Instruments and Exchange Act for the
year ended March 31, 2014 for the purpose of improving international
comparability of financial information as well as enhancement and efficiency
of our financial reporting.
4. Other Information
Notice:
This flash report contains forward-looking statements about Mitsui and its
consolidated subsidiaries. These forward-looking statements are based on
Mitsui’s current assumptions, expectations and beliefs in light of the
information currently possessed by it and involve known and unknown risks,
uncertainties and other factors. Such risks, uncertainties and other factors
may cause Mitsui’s actual consolidated financial position, consolidated
operating results or consolidated cash flows to be materially different from
any future consolidated financial position, consolidated operating results or
consolidated cash flows expressed or implied by these forward-looking
statements.
These important risks, uncertainties and other factors include, among others,
(1) risk of COVID-19, (2) business investment risks, (3) country risks, (4)
risks regarding climate changes, (5) commodity market risks, (6) foreign
currency risks, (7) stock price risks of listed stock Mitsui and its
subsidiaries hold, (8) credit risks, (9) risks regarding fund procurement,
(10) operational risks, (11) risks regarding employee’s compliance with
laws, regulations, and internal policies, (12) risks regarding information
systems and information securities, (13) risks relating to natural disasters,
terrorists and violent groups. For further information on the above, please
refer to Mitsui’s Annual Securities Report.
Forward-looking statements may be included in Mitsui’s Annual Securities
Report and Quarterly Securities Reports or in its other disclosure documents,
press releases or website disclosures. Mitsui undertakes no obligation to
publicly update or revise any forward-looking statements.
5. Consolidated Financial Statements
(1) Consolidated Statements of Financial Position
(Millions of Yen)
Assets
March 31, 2021 March 31, 2020
Current Assets:
Cash and cash equivalents ¥ 1,063,150 ¥ 1,058,733
Trade and other receivables 1,811,990 1,622,501
Other financial assets 429,986 562,899
Inventories 615,155 553,861
Advance payments to suppliers 143,714 167,250
Other current assets 143,477 159,175
Total current assets 4,207,472 4,124,419
Non-current Assets:
Investments accounted for using the equity method 3,044,001 2,880,958
Other investments 1,955,607 1,484,422
Trade and other receivables 305,952 422,423
Other financial assets 141,848 186,010
Property, plant and equipment 2,175,072 2,121,371
Investment property 274,847 251,838
Intangible assets 188,555 195,289
Deferred tax assets 112,055 58,908
Other non-current assets 110,436 80,654
Total non-current assets 8,308,373 7,681,873
Total ¥ 12,515,845 ¥ 11,806,292
(Millions of Yen)
Liabilities and Equity
March 31, 2021 March 31, 2020
Current Liabilities:
Short-term debt ¥ 300,485 ¥ 297,458
Current portion of long-term debt 450,941 399,904
Trade and other payables 1,313,341 1,136,504
Other financial liabilities 371,298 626,963
Income tax payables 58,915 46,206
Advances from customers 123,806 133,247
Provisions 36,909 25,844
Other current liabilities 46,027 34,984
Total current liabilities 2,701,722 2,701,110
Non-current Liabilities:
Long-term debt, less current portion 3,995,311 4,229,218
Other financial liabilities 116,531 105,279
Retirement benefit liabilities 40,253 39,956
Provisions 261,365 228,173
Deferred tax liabilities 550,776 412,971
Other non-current liabilities 27,000 28,653
Total non-current liabilities 4,991,236 5,044,250
Total liabilities 7,692,958 7,745,360
Equity:
Common stock 342,080 341,776
Capital surplus 396,238 402,652
Retained earnings 3,547,789 3,362,297
Other components of equity 373,786 (223,910)
Treasury stock (89,473) (65,138)
Total equity attributable to owners of the parent 4,570,420 3,817,677
Non-controlling interests 252,467 243,255
Total equity 4,822,887 4,060,932
Total ¥ 12,515,845 ¥ 11,806,292
(2) Consolidated Statements of Income and Comprehensive Income
Consolidated Statements of Income
(Millions of Yen)
Year ended Year ended
March 31, 2021 March 31, 2020
(As restated)
Revenue: ¥ 8,010,235 ¥ 8,484,130
Cost: (7,198,770) (7,644,707)
Gross Profit 811,465 839,423
Other Income (Expenses):
Selling, general and administrative expenses (606,423) (584,885)
Gain (loss) on securities and other investments-net 7,888 25,060
Impairment reversal (loss) of fixed assets-net (52,923) (110,809)
Gain (loss) on disposal or sales of fixed assets-net 4,646 9,510
Other income (expense)-net (13,945) 38,528
Total other income (expenses) (660,757) (622,596)
Finance Income (Costs):
Interest income 19,877 41,373
Dividend income 103,655 96,526
Interest expense (51,948) (89,638)
Total finance income (costs) 71,584 48,261
Share of Profit (Loss) of Investments Accounted for Using the Equity Method 227,910 269,232
Profit before Income Taxes 450,202 534,320
Income Taxes (99,821) (123,008)
Profit for the Year ¥ 350,381 ¥ 411,312
Profit for the Year Attributable to:
Owners of the parent ¥ 335,458 ¥ 391,513
Non-controlling interests 14,923 19,799
(Note)
Considering the presentation of revenue in the consolidated statement of
income in more detail in accordance with IFRS 15 "Revenue from Contracts with
Customers", the Company has presented the "revenue" and corresponding "cost"
of certain transactions in gross amounts beginning with the current fiscal
year. Those amounts for the previous fiscal year have also been restated to
conform to the presentation in the current fiscal year. This restatement has
no impact on gross profit, profit for the year attributable to owners of the
parent, or total equity attributable to owners of the parent.
Consolidated Statements of Comprehensive Income
(Millions of Yen)
Year ended Year ended
March 31, 2021 March 31, 2020
Profit for the Year ¥ 350,381 ¥ 411,312
Other Comprehensive Income:
Items that will not be reclassified to profit or loss:
Financial assets measured at FVTOCI 477,184 (376,024)
Remeasurements of defined benefit pension plans 32,514 (7,007)
Share of other comprehensive income of investments accounted for using the 1,671 (11,239)
equity method
Income tax relating to items not reclassified (119,092) 79,856
Items that may be reclassified subsequently to profit or loss:
Foreign currency translation adjustments 174,725 (152,404)
Cash flow hedges (831) (10,070)
Share of other comprehensive income of investments accounted for using the 86,445 (205,343)
equity method
Income tax relating to items that may be reclassified (6,951) 9,063
Total other comprehensive income 645,665 (673,168)
Comprehensive Income for the Year ¥ 996,046 ¥ (261,856)
Comprehensive Income for the Year Attributable to:
Owners of the parent ¥ 964,652 ¥ (259,448)
Non-controlling interests 31,394 (2,408)
(3) Consolidated Statements of Changes in Equity
(Millions of Yen)
Attributable to owners of the parent Non- Total Equity
controlling Interests
Common Stock Capital Surplus Retained Earnings Other Components of Equity Treasury Stock Total
Balance as at April 1, 2019 ¥ 341,482 ¥ 387,335 ¥ 3,078,655 ¥ 463,270 ¥ (7,576) ¥ 4,263,166 ¥ 267,142 ¥ 4,530,308
Cumulative effect of changes in accounting policies (5,306) (5,306) (5,306)
Balance as at April 1, 2019 after changes in accounting policies 341,482 387,335 3,073,349 463,270 (7,576) 4,257,860 267,142 4,525,002
Profit for the year 391,513 391,513 19,799 411,312
Other comprehensive income for the year (650,961) (650,961) (22,207) (673,168)
Comprehensive income for the year 391,513 (650,961) (259,448) (2,408) (261,856)
Transaction with owners:
Dividends paid to the owners of the parent (139,071) (139,071) (139,071)
Dividends paid to non-controlling interest shareholders (14,130) (14,130)
Acquisition of treasury stock (58,092) (58,092) (58,092)
Sales of treasury stock (167) (363) 530 0 0
Compensation costs related to share-based payment 294 317 611 611
Equity transactions with non-controlling interest shareholders 15,167 650 15,817 (7,349) 8,468
Transfer to retained earnings 36,869 (36,869) - -
Balance as at March 31, 2020 ¥ 341,776 ¥ 402,652 ¥ 3,362,297 ¥ (223,910) ¥ (65,138) ¥ 3,817,677 ¥ 243,255 ¥ 4,060,932
Profit for the year 335,458 335,458 14,923 350,381
Other comprehensive income for the year 629,194 629,194 16,471 645,665
Comprehensive income for the year 335,458 629,194 964,652 31,394 996,046
Transaction with owners:
Dividends paid to the owners of the parent (135,476) (135,476) (135,476)
Dividends paid to non-controlling interest shareholders (13,982) (13,982)
Acquisition of treasury stock (71,337) (71,337) (71,337)
Sales of treasury stock (125) (154) 280 1 1
Cancellation of treasury stock (46,722) 46,722 - -
Compensation costs related to share-based payment 304 1,771 2,075 2,075
Equity transactions with non-controlling interest shareholders (8,060) 888 (7,172) (8,200) (15,372)
Transfer to retained earnings 32,386 (32,386) - -
Balance as at March 31, 2021 ¥ 342,080 ¥ 396,238 ¥ 3,547,789 ¥ 373,786 ¥ (89,473) ¥ 4,570,420 ¥ 252,467 ¥ 4,822,887
(4) Consolidated Statements of Cash Flows
(Millions of Yen)
Year ended Year ended
March 31, 2021 March 31, 2020
Operating Activities:
Profit for the year ¥ 350,381 ¥ 411,312
Adjustments to reconcile profit for the year to cash flows
from operating activities:
Depreciation and amortization 273,639 256,125
Change in retirement benefit liabilities 1,884 (46,793)
Loss allowance 80,640 31,170
(Gain) loss on securities and other investments—net (7,888) (25,060)
(Gain) Loss on loans measured at FVTPL 21,657 -
Impairment (reversal) loss of fixed assets—net 52,923 110,809
(Gain) loss on disposal or sales of fixed assets—net (4,646) (9,510)
Interest income, dividend income and interest expense (98,442) (77,624)
Income taxes 99,821 123,008
Share of (profit) loss of investments accounted for using the equity method (227,910) (269,232)
Valuation (gain) loss related to contingent considerations and others (6,694) (6,447)
Changes in operating assets and liabilities:
Change in trade and other receivables (40,799) 105,425
Change in inventories (34,116) 38,159
Change in trade and other payables 139,474 (178,921)
Other—net (8,381) (60,179)
Interest received 52,702 72,699
Interest paid (59,904) (96,624)
Dividends received 307,838 299,244
Income taxes paid (119,483) (151,185)
Cash flows from operating activities 772,696 526,376
Investing Activities:
Net change in time deposits (30,080) 3,823
Net change in investments in equity accounted investees (56,518) 9,101
Net change in other investments 9,462 70,749
Net change in loan receivables 14,184 746
Net change in property, plant and equipment (206,404) (253,127)
Net change in investment property (53,118) (16,522)
Cash flows from investing activities (322,474) (185,230)
Financing Activities:
Net change in short-term debt (26,527) (27,158)
Net change in long-term debt (177,035) 88,397
Repayments of lease liabilities (58,380) (60,861)
Purchases and sales of treasury stock (71,337) (58,092)
Dividends paid (135,476) (139,071)
Transactions with non-controlling interest shareholders (18,208) (7,776)
Cash flows from financing activities (486,963) (204,561)
Effect of Exchange Rate Changes on Cash and Cash Equivalents 41,158 (33,959)
Change in Cash and Cash Equivalents 4,417 102,626
Cash and Cash Equivalents at Beginning of Year 1,058,733 956,107
Cash and Cash Equivalents at End of Year ¥ 1,063,150 ¥ 1,058,733
“Interest income, dividend income and interest expense”, “Interest
received”, “Interest paid” and “Dividends received” of Consolidated
Statements of Cash Flows include not only interest income, dividend income and
interest expense that are included in “Finance Income (Costs)” of
Consolidated Statements of Income, but also interest income, dividend income,
interest expense that are included in Revenue and Cost respectively and cash
flows related with them.
(5) Assumption for Going Concern: None
(6) Basis of Consolidated Financial Statements
Scope of subsidiaries and equity accounted investees
① Subsidiaries
1) Overseas 203
2) Japan 77
② Equity accounted investees (associated companies and joint ventures)
1) Overseas 186
2) Japan 48
A total of 486 subsidiaries and equity accounted investees are excluded from
the above. These include companies which are sub-consolidated or accounted for
under the equity method by subsidiaries other than trading subsidiaries.
(7) Changes in Accounting Policies and Changes in Accounting Estimates
1) Changes in Accounting Policies
Significant accounting policies applied in the Consolidated Financial
Statements for the year ended March 31, 2021 are the same as those applied in
the Consolidated Financial Statements of the previous fiscal year except for
the following.
The companies applied the following new standards to the Consolidated
Financial Statements from April 1, 2020.
IFRS Title Summaries
IFRS 3 Business Combinations
(amended in October 2018) Amendment of definition of a business
Impacts from the application of IFRS 3 "Business Combinations" amended in
October 2018 on the Consolidated Financial Statements are immaterial.
2) Changes in Accounting Estimates
The significant changes in accounting estimates in the Consolidated Financial
Statements for the year ended
March 31, 2021 are as follows.
(Impairment losses for the Moatize mine business and Nacala Corridor rail
& port infrastructure business in Mozambique)
Mitsui & Co. Mozambique Coal Finance Limited, Mitsui & Co. Nacala
Infrastructure Finance Limited and Mitsui & Co. Nacala Infrastructure
Investment B.V., which lends to Mozambique coal business, or lend to and
invest in Mozambique rail & port infrastructure business, recognized full
impairment to the carrying amount for both investment and loans of ¥73,599
million as a loss allowance for doubtful debt, a loss on loans measured at
FVTPL, an impairment loss included in share of profit (loss) of investments
accounted for using the equity method and an impairment loss for investments
accounted for using the equity method, due to the decrease of our production
assumptions based on the revision of the production plan and the decline in
the coal prices which are based on several third parties’ mid-long term
forecasts. In the Consolidated Statements of Income, a loss allowance is
recorded by ¥44,823 million (Mineral & Metal Resources ¥35,858 million,
Machinery & Infrastructure ¥8,965 million) in “Selling, general and
administrative expenses”, a loss on loans measured at FVTPL is recorded by
¥21,657 million (Mineral & Metal Resources ¥17,326 million, Machinery
& Infrastructure ¥4,331 million) in “Other income (expense) -net”, an
impairment loss included in share of profit (loss) of investments accounted
for using the equity method is recorded by ¥4,727 million (Mineral &
Metal Resources ¥3,782 million, Machinery & Infrastructure ¥945 million)
in “Share of Profit (Loss) of Investments Accounted for Using the Equity
Method”and an impairment loss for investments accounted for using the equity
method is recorded by ¥2,392 million (Mineral & Metal Resources ¥1,914
million, Machinery & Infrastructure ¥478 million) in “Gain (loss) on
securities and other investments-net”, respectively.
(Loss related to selling the entire interest in Caserones copper mine
business)
Mitsui & Co., Ltd. and its subsidiary, Mitsui Bussan Copper Investment
& Co., Ltd., in Mineral & Metal Resources segment which invests and
lends to Caserones copper mine business, recognized a loss of ¥7,215 million,
with the conclusion and the completion of the basic agreement to sell the
entire interest as a part of reorganization and reconstructing of asset
portfolio. In the Consolidated Statements of Income, a loss allowance for the
related lending and others is recorded by ¥8,308 million in “Selling,
general and administrative expenses” and a loss for the related investments
accounted for using the equity method is recorded by ¥888 million in “Gain
(loss) on securities and other investments - net”, and the profit of the
realized foreign currency translation adjustment on disposal of foreign
operations and others is recorded by ¥1,981 million in “Gain (loss) on
securities and other investments - net”, respectively.
(Impairment loss for the oil development business)
Mitsui E&P Italia A S.r.l., a subsidiary in the Energy Segment engaged in
the onshore oil development in the Basilicata region in Italy, recognized an
impairment loss of ¥23,351 million in “Impairment reversal (loss) of fixed
assets - net” in the Consolidated Statements of Income, of which impairment
loss of property, plant and equipment is ¥16,169 million and impairment loss
of goodwill is ¥7,182 million, by reducing the carrying amount of the
goodwill and production equipment and others to the recoverable amount of
¥158,206 million. The impairment loss was mainly related to a decline in the
crude oil price. The recoverable amount above represented the value in use.
The discount rate used to calculate the value in use is deemed to reflect the
market average profit margin and the risks inherent to the cash-generating
unit.
(Impairment loss for the locomotive leasing business in Europe)
Mitsui Rail Capital Europe B.V., a subsidiary in the Machinery &
Infrastructure Segment engaged in the locomotive leasing business in Europe,
recognized an impairment loss of ¥9,300 million in “Impairment reversal
(loss) of fixed assets - net” in the Consolidated Statements of Income by
reducing the carrying amount of the locomotives, goodwill and others to the
recoverable amount of ¥79,651 million. Out of the impairment loss, the amount
of property, plant and equipment is ¥5,138 million, and the amount of
goodwill and others is ¥4,162 million. The impairment loss was mainly related
to a lower operating ratio of the locomotives.
The recoverable amount of property, plant and equipment represented the value
in use and the fair value less costs of disposal, and the recoverable amount
of goodwill and others represented the value in use. The discount rate used to
calculate the value in use is deemed to reflect the market average profit
margin and the risks inherent to the cash-generating unit. The fair value less
costs of disposal is based on the reasonable price considering the recent sale
cases of the asset being valued, and the fair value is classified as level 3.
(Loss related to the passenger rail franchise business in the United
Kingdom(“UK”))
The passenger rail franchise business in the UK in the Machinery &
Infrastructure Segment, which is invested and financed by the Company and its
equity method investee, has been in continuous discussions regarding early
termination of the franchise agreements under effect of the COVID-19 pandemic,
and finally has received the final valuation of termination payments by the UK
Department for Transport(“DfT”). The Company recognized a loss to the
carrying amount for investments, loans, future loan contribution obligations
of ¥11,013 million as a loss allowance for doubtful debt, a provision for
loss on guarantees, an impairment loss included in share of profit (loss) of
investments accounted for using the equity method and additional losses
included in share of profit (loss) of investments accounted for using the
equity method for future loan contribution obligations, based on the final
valuation of termination payments presented by the DfT and the status of
discussions to date. In the Consolidated Statements of Income, a loss
allowance for doubtful debt is recorded by ¥4,902 million in “Selling,
general and administrative expenses”, a provision for loss on guarantees is
recorded by ¥1,457 million in “Other income(expenses)-net”, an impairment
loss and additional losses included in share of profit (loss) of investments
accounted for using the equity method is recorded by ¥4,654 million in
“Share of Profit(Loss) of Investments Accounted for Using the Equity
Method”, respectively.
(Recognition of deferred tax assets in the U.S. energy subsidiaries)
The Company transferred and reorganized investment subsidiaries in U.S. oil
and gas project business to MBK Energy Holdings USA Inc. (“MEH”) on
November 30, 2020 for the centralization of management of the oil and gas
projects in the U.S. Due to this reorganization, the Company recognized
deferred tax assets mainly relating to tax losses in MEH’s subsidiaries to
be realized against future taxable income generated primarily from long-term
service agreements of U.S. LNG project, and gain of ¥39,030 million has been
recognized in “Income Taxes” on the Consolidated Statement of Income for
the year ended March 31, 2021.
(Change in estimate for asset retirement obligations)
Mitsui E&P Australia Pty Ltd, a subsidiary in the Energy Segment, has
changed its estimate of the asset retirement obligations as the
decommissioning costs associated with Enfield project based on new information
on the decommissioning costs from the operator.
The increase of 7,654 million in asset retirement obligations due to this
change in estimate has been recorded in "Other income(expense)-net" in the
Consolidated Statements of Income because the depreciation of fixed assets has
been completed.
(8) Changes in Presentation
（Consolidated Statements of Cash Flows）
“Repayments of lease liabilities”, which was included in “Net change in
long-term debt” for the year ended March 31, 2020 is separately presented
from the year ended March 31, 2021 in order to indicate the calculation of
Core Operating Cash Flow whose formula has been altered from the year ended
March 31, 2021. Consolidated Statements of Cash Flows for the year ended March
31, 2020 is reclassified to conform to this change in presentation.
As a result, the amount of ¥27,536 million for the year ended March 31, 2020,
which was presented in “Net change in long-term debt” within “Cash Flows
from Financing Activities” in the Consolidated Statements of Cash Flows for
the year ended March 31, 2020 has been reclassified and presented as ¥88,397
million for “Net change in long-term debt” and as ¥(60,861) million for
“Repayments of lease liabilities”.
（Consolidated Statements of Changes in Equity）
Compensation costs related to stock options and share performance-linked
restricted stock are integrated in “Compensation costs related to
share-based payment” from the year ended March 31, 2021. Compensation costs
related to the share-based compensation plan for employees introduced in the
year ended March 31, 2021 is also included in this account.
As a result, in Consolidated Statements of Changes in Equity for the year
ended March 31, 2020, the capital surplus of ¥ 23 million for “Compensation
costs related to stock options”, the common stock of ¥ 294 million and the
capital surplus of ¥ 294 million for “Compensation costs related to share
performance-linked restricted stock” have been reclassified and presented as
the common stock of ¥ 294 million and the capital surplus of ¥ 317 million
for “Compensation costs related to share-based payment”.
(9) Notes to Consolidated Financial Statements
① Segment Information
Year ended March 31, 2021 (from April 1, 2020 to March 31, 2021)
(Millions of Yen)
Iron & Steel Products Mineral & Metal Resources Energy Machinery & Infrastructure Chemicals Lifestyle Innovation & Corporate Development Total Others/ Consolidated Total
Adjustments and Eliminations
Revenue 436,579 1,396,902 838,598 792,200 1,933,795 2,373,082 236,120 8,007,276 2,959 8,010,235
Gross Profit 21,184 251,150 62,887 107,729 124,904 133,782 107,001 808,637 2,828 811,465
Share of Profit (Loss) of Investments Accounted for Using the Equity Method 4,309 70,390 18,820 95,268 11,304 13,445 13,883 227,419 491 227,910
Profit for the Year Attributable to Owners of the Parent 2,119 179,917 27,161 45,935 43,520 12,724 50,161 361,537 (26,079) 335,458
Core Operating Cash Flow 2,030 308,146 123,156 78,700 62,513 19,776 55,147 649,468 8,670 658,138
Total Assets at March 31, 2021 566,020 2,566,491 2,566,305 2,291,278 1,345,469 2,009,315 1,191,842 12,536,720 (20,875) 12,515,845
Year ended March 31, 2020 (from April 1, 2019 to March 31, 2020) (As restated)
(Millions of Yen)
Iron & Steel Products Mineral & Metal Resources Energy Machinery & Infrastructure Chemicals Lifestyle Innovation & Corporate Development Total Others/ Consolidated Total
Adjustments and Eliminations
Revenue 492,291 1,173,163 893,647 1,065,065 2,171,610 2,495,813 185,921 8,477,510 6,620 8,484,130
Gross Profit 24,554 225,966 141,123 134,596 116,757 134,924 60,099 838,019 1,404 839,423
Share of Profit (Loss) of Investments Accounted for Using the Equity Method 13,121 59,152 45,211 88,372 11,540 34,996 16,984 269,376 (144) 269,232
Profit for the Year Attributable to Owners of the Parent 4,749 183,273 57,835 89,356 22,332 32,034 14,568 404,147 (12,634) 391,513
Core Operating Cash Flow 2,153 243,716 206,459 86,841 35,841 20,494 3,916 599,420 (38,389) 561,031
Total Assets at March 31, 2020 539,599 1,921,883 2,566,282 2,360,321 1,217,737 1,907,621 1,198,286 11,711,729 94,563 11,806,292
Notes:1. “Others / Adjustments and Eliminations” includes of the Corporate
Staff Unit which provides financing services and operations services to the
companies and affiliated companies. Total assets of “Others / Adjustments
and Eliminations” at March 31, 2020 and March 31, 2021 includes cash, cash
equivalents and time deposits related to financing activities, and assets of
the Corporate Staff Unit and certain subsidiaries related to the above
services amounting to ¥7,142,647 million and ¥7,202,925 million,
respectively.
2. Transfers between reportable segments are made at cost plus a markup.
3. Profit for the Period Attributable to Owners of the parent of “Others
/Adjustments and Eliminations” includes income and expense items that are
not allocated to specific reportable segments, and eliminations of
intersegment transactions.
4. Total assets of “Others / Adjustments and Eliminations” at March 31,
2020 and March 31, 2021 includes elimination of receivables and payables
between segments amounting to ¥7,048,084 million and ¥7,223,800 million,
respectively.
5. Formerly, Core Operating Cash Flow was calculated by eliminating the sum of
the “Changes in Operating Assets and Liabilities” from “Cash Flows from
Operating Activities” as presented in the Consolidated Statements of Cash
Flows. During the year ended March 31 2021, it is calculated by additionally
deducting the “Repayments of lease liabilities” as presented in the
“Cash Flows from Financing Activities”. In accordance with this change,
Core Operating Cash Flow for the year ended March 31, 2020 has been restated.
6. In order to accelerate our multifaceted, flexible initiatives that combine
various kinds of knowledge from different business domains, a part of business
of next-generation electric power was transferred from the “Machinery &
Infrastructure” segment to the “Energy” segment, in conjunction with the
creation of the Energy Solutions Business Unit in “Energy” segment, during
the year ended March 31 2021. In accordance with this change, the segment
information for the year ended March 31, 2020 has been restated to conform to
the current and previous fiscal year.
7.As described in the Note in Consolidated Statements of Income, the Company
has reconsidered the presentation of revenue from certain transactions, and
has presented revenues based on the results of the reconsideration for the
current and previous fiscal year.
② Earnings per share
The following is a reconciliation of basic earnings per share attributable to
owners of the parent to diluted earnings per share attributable to owners of
the parent for the years ended March 31, 2021 and 2020:
Year ended March 31, 2021(from April 1, 2020 to March 31, 2021)
Profit Shares Per share amount
(numerator) (denominator)
Millions of Yen In Thousands Yen
Basic Earnings per Share Attributable to Owners of the Parent:
Profit for the Year Attributable to Owners of the Parent 335,458 1,683,338 199.28
Effect of Dilutive Securities:
Adjustments of effect of:
Dilutive securities of associated companies (1) －
Stock options － 836
Diluted Earnings per Share Attributable to Owners of the Parent:
Profit for the Year Attributable to Owners of the Parent after effect of 335,457 1,684,174 199.18
dilutive securities
Year ended March 31, 2020(from April 1, 2019 to March 31, 2020)
Profit Shares Per share amount
(numerator) (denominator)
Millions of Yen In Thousands Yen
Basic Earnings per Share Attributable to Owners of the Parent:
Profit for the Year Attributable to Owners of the Parent 391,513 1,731,384 226.13
Effect of Dilutive Securities:
Adjustments of effect of:
Dilutive securities of associated companies (22) －
Stock options － 1,046
Diluted Earnings per Share Attributable to Owners of the Parent:
Profit for the Year Attributable to Owners of the Parent after effect of 391,491 1,732,430 225.98
dilutive securities
③ Subsequent Events
Stock Repurchase
At the meeting of the Board of Directors held on April 30, 2021, the Company
resolved to repurchase its stock in accordance with Article 156 of the
Companies Act of Japan, as applied pursuant to paragraph 3 of Article 165 of
the Companies Act of Japan. Details of the repurchase are as follows.
1. Purpose of stock repurchase
To enhance shareholder return and to improve capital efficiency
2. Details of repurchase
(1) Class of share
Common stock of the Company
(2) Total number of shares of common stock to be repurchased
Up to 30 million shares（1.8% of the total number of shares outstanding
excluding treasury stock）
(3) Total amount
Up to ¥50,000 million
(4) Period
From May 6, 2021 to June 23, 2021
(5) Repurchase method
Auction market on Tokyo Stock Exchange
④ The Fire Incident of Intercontinental Terminals Company LLC
On March 17, 2019 (US time) a fire began at the Deer Park tank terminal of
Intercontinental Terminals Company LLC (“ITC”), a wholly owned U.S.
subsidiary of Mitsui & Co., Ltd. The Deer Park tank terminal is located in
the outskirts of Houston, Texas. The fire partially damaged tanks owned by
ITC. ITC has resumed its operation after discussions with related authorities.
Harris County Fire Marshal's Office released its final report with respect to
the fire incident on December 6, 2019 (US time) and the report classified the
fire as accidental, while not specifying the cause of the fire. The cause of
the fire is still under investigation by other relevant authorities.
The profit and loss related to this incident recognized in the year ended
March 31, 2020 and 2021, and the outstanding balance of related provision as
of March 31, 2021 are immaterial.
There are multiple lawsuits that have been brought against ITC in relation to
this incident. These lawsuits are at the early stages and the ultimate outcome
of these lawsuits is not expected to have significant impact on our
consolidated financial position, operating results and cash flow.
⑤ Taxation on capital gain in India
Earlyguard Limited (“EG”), a UK subsidiary of Mitsui & Co., Ltd.,
received a tax payment notice dated January 21, 2020 which requested payment
of 24.0 billion Indian Rupees (¥36.0 billion) from Indian tax authority.
The taxable income of this notice is the capital gain on sales of Finsider
International Company Limited (a UK company that owned 51% of Sesa Goa, an
Indian iron ore company) shares held by EG in April 2007. Although EG treated
the capital gain properly according to the tax laws at that time, the tax
payment notice has been issued. On February 17, 2021, EG commenced arbitration
under the UK-India bilateral investment treaty in order to dispute this tax
payment notice.
The company does not expect a significant impact on our consolidated financial
position, operating results and cash flow at this stage.
View source version on businesswire.com:
https://www.businesswire.com/news/home/20210430005220/en/
(https://www.businesswire.com/news/home/20210430005220/en/)
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