Japan’s Marubeni posts 20% drop in 9-month profit on lower resource prices

JAPANESE trading house Marubeni on Friday (Feb 2) reported a 20 per cent drop in April-December net profit due to lower prices of coking coal and energy and the one-off effect of a disposal that boosted year-ago profits.

Marubeni posted a profit of 371.5 billion yen (S$3.4 billion) in the nine months through Dec 31 compared with 463.5 billion yen a year earlier when it booked a special gain from the sale of US unit Gavilon’s grain business.

The trading company stuck to its full-year profit forecast through end-March of 450 billion yen, below the 462.8 billion yen mean estimate in a poll of 10 analysts compiled by LSEG.

Like its peers, Marubeni has been reinforcing its non-resource segments such as power and agri businesses.

Adjusted net profit in non-resource segments, which excludes one-off gains or losses, is expected to reach 303 billion yen this year, staying at around 300 billion yen level for a third straight year, chief financial officer Takayuki Furuya said.

“We plan to keep on investing in growth segments, mainly non-resource areas,” Furuya told a news conference.

Still, Marubeni expects its Roy Hill iron ore mine in Australia to contribute around 40 billion yen to its profit this year, up from 28.5 billion yen a year earlier, Furuya said.

The company owns 15 per cent stake in the mine, which is majority owned by Australian billionaire Gina Rinehart’s Hancock Prospecting.

“Iron ore and copper will likely show better performance this fiscal year than last year, helping offset lower earnings from coking coal business,” he said.

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Marubeni also owns a stake in Sakhalin Oil and Gas Development Co (Sodeco), a consortium of Japanese firms holding 30 per cent stake in the Sakhalin-1 oil and gas project in Russia.

Furuya said Marubeni’s annual forecast does not factor in dividend income from the Sakhalin 1, but declined to give any further details about the project. REUTERS