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MarketScreener Homepage  >  Equities  >  Tokyo Stock Exchange  >  Mitsui & Co., Ltd.    8031   JP3893600001

MITSUI & CO., LTD.

(8031)
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Mitsui : may book up to $642 million impairment loss amid oil slump

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03/26/2020 | 11:15pm EDT
Man walks past the logo of Japanese trading company Mitsui & Co. in Tokyo

Japanese trading house Mitsui & Co Ltd said on Friday it may book an impairment loss of 50 billion to 70 billion yen ($458 million to $642 million) in the year ending March 31 due to falling commodity prices and coronavirus impact.

Mitsui said it is likely to book an impairment loss on its stakes in the Eagle Ford shale oil and gas project in the United States and the Tempa Rossa oil field in Italy among other oil and gas projects due to plunging oil prices.

International benchmark oil prices have more than halved since the start of the year as the rapid spread of the coronavirus interrupts business activity, while a crude glut swelled after the collapse of an output deal between the Organization of Petroleum Exporting Countries and Russia (OPEC+).

Mitsui also said it may book an impairment loss on fixed assets as well as an appraisal loss on shareholdings to reflect slumping stock markets.

"The environment for our trading operations is deteriorating due to slower manufacturing activity amid weakening demand, disorder of distribution and impact on procurement of raw materials, but we have not recognised any events that could have a significant impact on our earnings this year," it said.

In early February, Mitsui forecast 450 billion yen in net profit for the current financial year.

"We are still reassessing the overall impact on our full-year profit forecast," a Mitsui spokesman said.

The company said in a statement it will maintain its dividend forecast of 40 yen per share for the second half of the year.

Shares in Mitsui rose 3.1% to 1,600.0 yen by 0347 GMT on Friday after the company's announcement. The broader TOPIX index was up 2.2%.

The announcement comes two days after peer Marubeni Corp forecast a record net loss of 190 billion yen for the current year as the coronavirus outbreak drives an unprecedented oil price slide and falls in other commodity prices.

Analyst Thanh Ha Pham at Jefferies said after Marubeni's new guidance that "there is a real risk other trading companies will follow Marubeni's example and might decide to impair assets."

By Yuka Obayashi

Stocks mentioned in the article
ChangeLast1st jan.
MARUBENI CORPORATION -4.16% 539 End-of-day quote.-2.69%
MITSUI & CO., LTD. -4.24% 1503.5 End-of-day quote.-3.06%
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Financials (JPY)
Sales 2020 6 997 B
EBIT 2020 256 B
Net income 2020 435 B
Debt 2020 3 769 B
Yield 2020 5,66%
P/E ratio 2020 5,72x
P/E ratio 2021 5,86x
EV / Sales2020 0,89x
EV / Sales2021 0,90x
Capitalization 2 466 B
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Technical analysis trends MITSUI & CO., LTD.
Short TermMid-TermLong Term
TrendsBearishBearishBearish
Income Statement Evolution
Consensus
Sell
Buy
Mean consensus OUTPERFORM
Number of Analysts 10
Average target price 2 097,78  JPY
Last Close Price 1 444,50  JPY
Spread / Highest target 73,1%
Spread / Average Target 45,2%
Spread / Lowest Target 24,6%
EPS Revisions
Managers
NameTitle
Tatsuo Yasunaga President, CEO & Representative Director
Masami Iijima Chairman
Takakazu Uchida CFO, Representative Director & Head-Accounting
Shinsuke Fujii Representative Director, Executive VP & CAO
Toshiro Mutoh Independent Outside Director
Sector and Competitors
1st jan.Capitalization (M$)
MITSUI & CO., LTD.-3.06%23 932
MITSUBISHI CORPORATION-2.74%31 752
ITOCHU CORPORATION-3.05%31 058
SUMITOMO CORPORATION-2.33%14 385
SAMSUNG C&T CORPORATION0.90%12 047
MARUBENI CORPORATION-2.69%8 693