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Mitsubishi Corp cuts FY profit view on oil, coal slumping prices

Japan's biggest trading firm Mitsubishi Corp cut its full-year profit forecast by 17 percent on Thursday, blaming a worse-than-expected fall in prices of commodities such as oil and coking coal.

Chief Financial Officer Shuma Uchino said he expects no quick recovery in commodities markets and that the company may delay expansion plans such as for coal mines in Australia.

Like international oil majors and mining companies, Japanese trading houses have been caught flat-footed by the rout in commodities brought about by falling demand from top consumer China where economic growth has slowed.

Mitsubishi now expects group net profit of 300 billion yen ($2.47 billion) for the year through March 2016, instead of 360 billion yen estimated three months prior.

The new forecast fell below the Thomson Reuters I/B/E/S mean estimate of 353 billion yen.

"We are cutting our profit estimate as the prices of natural resources have fallen more than we had anticipated," Uchino said at a media briefing. "We had expected to see a recovery in commodities prices in around 2017, but under the current environment, the recovery may be delayed by about one year."

Mitsubishi's shares fell more than 6 percent in Thursday trade.

Hit by plunging prices of oil and coal, the Tokyo-based company cut its full-year net profit estimate in the energy sector to 55 billion yen from 80 billion yen, and in metals to a loss of 35 billion yen from profit of 7 billion yen.

The downgrade of the metals estimate was mainly due to an operational loss on coking coal assets, Uchino said.

Mitsubishi, in partnership with BHP Billiton Ltd, operates the world biggest coking coal export business from Australia. The pair has been investing in mines to increase output.

"We may have to adjust the timing of the planned investment in the existing resource assets depending on the market environment," Uchino said.

($1 = 121.4900 yen)

source: http://www.reuters.com