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Mitsubishi books 430b yen impairment, expects annual loss

Thursday, March 24, 2016 - 16:25

[TOKYO] Mitsubishi Corp, Japan's largest trading house, expects to book an impairment charge of 430 billion yen (S$5.22 billion) on its commodities business.

The Tokyo-based trader also expects a net loss of 150 billion yen in the 12 months ending March 31, compared with net income of 400.6 billion yen the previous year, according to a regulatory statement.

Japan's "sogo shosha", or general trading houses like Mitsubishi, Mitsui & Co and Sumitomo Corp invested in metal and energy only to see prices fall, resulting in writedowns that squeezed profits.

The Bloomberg Commodity Index, a measure of returns from 22 items, has tumbled about 40 per cent in the last two years, earlier this year touching the lowest level since 1991.

sentifi.com

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On Wednesday, rival trading house Mitsui booked 260 billion yen in one-off charges and forecast its first net loss since it was founded in its modern form in 1947.

Sumitomo took a 77 billion yen writedown at a nickel project in Madagascar earlier this year.

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