Japanese trading houses lift dividend forecasts on record profits
TOKYO, Feb 3 (Reuters) - Japanese trading houses Mitsui & Co and Mitsubishi Corp lifted their full-year profit forecasts and promised to pay higher dividends on Friday after spiking global commodity prices boosted their quarterly earnings.
Japanese trading houses are benefitting from rising commodity prices from coal to liquefied natural gas (LNG), boosted by China's recovery from COVID-19 and Western sanctions on Russia.
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Mitsubishi, which posted a 311% increase in profits to a record 956 billion yen ($7.4 billion) for the nine months to the end of December, raised its full-year net profit forecast to 1.15 trillion yen from 1.03 trillion yen.
Mitsui's profit for April-December jumped 208% to a record 840.8 billion yen and it lifted its annual forecast by 100 billion yen to 1.08 trillion yen.
"The operation of the U.S. Cameron LNG is going well. Maintaining high production and increasing supply volume amid tight global LNG supply contributed to our LNG trading," Mitsui chief financial officer Tetsuya Shigeta told a news conference.
Mitsui and Mitsubishi retained their stakes in Russia's Sakhalin 2 LNG project after the Kremlin ordered a change in operating company in retaliation for Western sanctions imposed on Moscow after it sent troops to Ukraine last year.
Backed by strong revenues, Mitsui raised its full-year dividend forecast by 5 yen to 135 yen per share and increased its share buyback programme by 100 billion yen, extending the timing to July.
Mitsubishi, which like Mitsui is involved in a number of energy projects worldwide along with trading business, lifted its annual dividend forecast by 25 yen to 180 yen per share and said it would spend up to 100 billion yen to buy 2.3% of its shares.
Their peers, trading houses Marubeni Corp and Itochu Corp, also increased their dividend forecasts, by 3 yen to 78 yen per share and by 10 yen to a minimum 140 yen per share, respectively, on record nine-month profits.
Marubeni's net profit rose 41.5% to 463.5 billion yen. The firm lifted its full-year profit forecast by 4% to a record 530 billion yen, boosted by UK power sales along with coking coal and iron ore businesses in Australia.
Itochu posted a 3% increase in April-December net profit to 682.2 billion yen, achieving 85% of its full-year profit target of 800 billion yen. The company plans to spend 25 billion yen to buy back around 0.5% of its shares by March 31.
Marubeni will also conduct a flexible share buyback but has yet to announce the details and timing.
($1 = 128.6800 yen) (Reporting by Yuka Obayashi in Tokyo and Katya Golubkova in Riga; Editing by Tom Hogue and Mark Potter)