TOKYO (Reuters) – Japanese trading firm Mitsubishi Corp is likely to post its first annual loss in the year ending March 31, totalling nearly $ 900 million (638.34 million pounds), hurt by massive writedowns from the commodities slump, the Nikkei business daily said on Thursday.
Mitsubishi’s group net loss is expected to come to more than 100 billion yen ($ 890 million) as the company books an impairment loss of about 400 billion yen on its resource assets, the paper said.
The company confirmed in a statement that it was considering a downward revision to its earnings forecast “based on an examination of our assets”, although it gave no specifics. It said it planned to make an announcement after its board met on Thursday.
Japanese trading firms, like major international oil and mining companies, have been caught off-guard by the commodities slump brought about by China’s economic slowdown.
Another Japanese trading firm, Mitsui & Co Ltd , on Wednesday predicted its first net loss since it was established in 1947 after a slide in energy and metal prices forced it book 260 billion yen in writedowns.
Mitsubishi’s impairment losses will include those on its stake in Anglo American Sur, Chilean copper company, and a liquefied natural gas (LNG) project in Australia, the paper said.
Its partner Woodside Petroleum (WPL.AX) and other stakeholders on Wednesday shelved plans to build the $ 30 billion Browse floating LNG project in the face of global oversupply, spelling the end of an era of mega LNG projects.
Mitsui, meanwhile, said on Wednesday it would book a 90 billion yen loss on its stake in Anglo American Sur and a 40 billion yen impairment loss on the Browse project.
Analysts have said hefty losses from weak markets for everything from oil to iron ore may further deter Japanese trading houses from investing in energy and metals projects.
Shares in Mitsubishi were down 4.4 percent at 1,913.0 yen as of 0128 GMT while shares in Mitsui, which announced its revision after the market closed the previous day, were down 7.3 percent at 1,302.5 yen. They were underperforming the Nikkei index
(.N225) which fell about 0.5 percent.
($ 1 = 112.3500 yen)
(Reporting by Osamu Tsukimori and Yuka Obayashi; Editing by Chris Reese and Stephen Coates)
