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MarketScreener Homepage  >  Equities  >  Tokyo Stock Exchange  >  Mitsubishi Corporation    8058   JP3898400001

MITSUBISHI CORPORATION

(8058)
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Mitsubishi : Financial Results for the Six Months Ended September 2020TSE

11/05/2020 | 04:57am EST

FINANCIAL RESULTS FOR

THE SIX MONTHS ENDED SEPTEMBER 2020

Mitsubishi Corporation

2-3-1 Marunouchi, Chiyoda-ku, Tokyo, JAPAN 100-8086

https://www.mitsubishicorp.com/

November 5, 2020

Mitsubishi Corporation

FINANCIAL HIGHLIGHTS FOR THE SIX MONTHS ENDED SEPTEMBER 30, 2020

(Based on IFRS) (Consolidated)

1. Consolidated operating results for the six months ended September 30, 2020

(1) Revenues and income

Note:

Figures less than one million yen are rounded.

%: change from the same period of the previous year

Profit for the period

Revenues

Profit before tax

Profit for the period

attributable to

Comprehensive income

owners of the Parent

For the six months ended

Millions of Yen

%

Millions of Yen

%

Millions of Yen

%

Millions of Yen

%

Millions of Yen

%

September 30, 2020

5,728,347

(25.8)

143,477

(59.7)

102,408

(62.1)

86,687

(64.2)

152,480

480.7

September 30, 2019

7,723,892

(2.8)

356,440

(20.9)

269,939

(20.4)

242,359

(21.6)

26,257

(94.6)

Profit for the period

Profit for the period

attributable to

attributable to

owners of the Parent

owners of the Parent

per share (basic)

per share (diluted)

For the six months ended

Yen

Yen

September 30, 2020

58.68

58.55

September 30, 2019

154.97

154.64

Note:

Profit for the period attributable to owners of the Parent per share (basic) and Profit for the period attributable to owners of the Parent per share (diluted) are calculated based on Profit for the

period attributable to owners of the Parent.

(2) Financial position

Equity attributable to

Ratio of equity attributable to

Total assets

Total equity

owners of the Parent to total

owners of the Parent

assets

As of

Millions of Yen

Millions of Yen

Millions of Yen

%

September 30, 2020

17,798,836

6,231,126

5,247,676

29.5

March 31, 2020

18,049,661

6,216,894

5,227,359

29.0

2. Dividends

Cash dividend per share (Yen)

(Record date)

1Q end

2Q end

3Q end

4Q end

Annual

Fiscal Year

64.00

68.00

132.00

ended March 31, 2020

Fiscal Year

67.00

ending March 31, 2021

Fiscal Year

67.00

134.00

ending March 31, 2021 (Forecast)

Note:

Change from the latest released dividend forecasts: No

3. Consolidated forecasts for the fiscal year ending March 31, 2021 (April 1, 2020 to March 31, 2021)

Note:

%: change from the previous year.

Profit attributable to

Profit attributable to owners of

owners of the Parent

the Parent per share

For the year ending

Millions of Yen

%

Yen

March 31, 2021

200,000

(62.6)

135.47

Note: Change from the latest released earnings forecasts: No

4. Notes

  1. Changes in significant subsidiaries during the period (changes in specified subsidiaries causing changes in scope of consolidation): None New companies:
    Excluded companies:
  2. Changes in accounting policies and accounting estimates

-1- Changes in accounting policies required by IFRS : None

-2- Changes in accounting policies other than -1- : None

-3- Changes in accounting estimates : None

Please refer to page 12, "3. Changes in Accounting Policies and Accounting Estimates."

(3) Number of shares issued (Common stock)

-1- Number of shares issued at quarterly-end (including treasury stock)

(September 30, 2020)

1,485,723,351

(March 31, 2020)

1,590,076,851

-2- Number of treasury stock at quarterly-end

(September 30, 2020)

9,827,284

(March 31,

2020)

105,580,338

-3- Average number of shares during each of the six months ended September 30, 2020 and 2019

(September 30, 2020)

1,477,188,740

(September 30,

2019)

1,563,917,783

Disclosure Regarding Quarterly Review Procedures

This earnings release is not subject to independent Auditor's review procedures.

Forward-looking Statements

Earnings forecasts and other forward-looking statements in this release are based on data currently available to management and certain assumptions that management believes are reasonable. The achievement of said forecasts cannot be promised. Actual results may therefore differ materially from these statements for various reasons. For cautionary notes concerning assumptions for earnings forecasts, please refer to "1. (4) Forecasts for the Year Ending March 2021" on page 5.

Contents

  1. Qualitative Information …………………………………………………………………………2
  1. Results of Operations ……………………………………………………………………………2
  2. Financial Position ………………………………………………………………………………3
  3. Cash Flows ………………………………………………………………………………………3
  4. Forecasts for the Year Ending March 2021 ……………………………………………………5
  1. Condensed Consolidated Financial Statements …………………………………………………6
  1. Condensed Consolidated Statement of Financial Position ………………………………………6
  2. Condensed Consolidated Statement of Income …………………………………………………8

(3)

Condensed Consolidated Statement of Comprehensive Income ………………………………9

(4)

Condensed Consolidated Statement of Changes in Equity ……………………………………10

(5) Condensed Consolidated Statement of Cash Flows ……………………………………………11

  1. Changes in Accounting Policies and Accounting Estimates …………………………………12
  2. Notes Concerning Going Concern Assumption ………………………………………………12
  • Mitsubishi Corporation will hold an earnings conference call for the six months ended September 2020, inviting institutional investors and analysts to join.

The conference material can be accessed live in Japanese from our website (Investor Relations section) at the following URL:

https://www.mitsubishicorp.com/jp/ja/ir/index.htmlTime and date of the earnings conference call:

From 17:00 to 18:00 on Thursday, November 5, 2020 (JST)

1

1. Qualitative Information

(Profit for the period, as used hereinafter, refers to profit for the period attributable to owners of the Parent.)

(1) Results of Operations

Revenues was ¥5,728.3 billion, a decrease of ¥1,995.6 billion, or 26% year over year. This was mainly due to decreased transaction volumes in the Petroleum business and the Steel business.

Gross profit was ¥761.2 billion, a decrease of ¥141.9 billion, or 16% year over year, mainly due to decreased market prices in the Australian metallurgical coal business and a decrease in franchise commissions from franchise stores in the Convenience store business.

Selling, general and administrative expenses was ¥687.9 billion, a decrease of ¥23.1 billion, or 3% year over year, mainly due to reductions in business activities due to the impact of COVID-19.

Gains on investments decreased ¥10.1 billion, or 38% year over year, to ¥16.8 billion, mainly due to worsened fund evaluation profit and loss and rebound from fair value evaluation profit due to Chiyoda Corporation becoming a consolidated subsidiary in the previous year.

Impairment losses on property, plant and equipment and others amounted to ¥3.1 billion, an improvement of ¥4.0 billion, or 56% year over year, mainly due to rebound from impairments of ship facilities in the previous year.

Other income (expense)-net improved ¥8.4 billion, or 59% year over year, to an expense amount of ¥5.8 billion, mainly due to fluctuations of foreign currency exchange.

Finance income decreased ¥40.6 billion, or 48% year over year, to ¥44.5 billion, mainly due to decreased dividend income from resource-related investments and decreased interest income as a result of lower US dollar interest rates.

Share of profit of investments accounted for using the equity method decreased ¥67.1 billion, or 63% year over year, to ¥39.8 billion, mainly due to impairment losses on property, plant and equipment and decreased vehicle sales in Mitsubishi Motors Corporation.

As a result, profit before tax decreased ¥212.9 billion, or 60% year over year, to ¥143.5 billion.

Accordingly, profit for the period decreased ¥155.7 billion, or 64% year over year, to ¥86.7 billion.

2

(2) Financial Position

Total assets at September 30, 2020 was ¥17,798.8 billion, a decrease of ¥250.9 billion, or 1%, from March 31, 2020.

Current assets was ¥6,534.8 billion, a decrease of ¥402.6 billion, or 6%, from March 31, 2020. This was mainly due to a decrease in trade and other receivables attributable in part to decreased transaction volumes in the Steel business and the Petroleum business.

Non-current assets was ¥11,264.0 billion, an increase of ¥151.7 billion, or 1%, from March 31, 2020. This was mainly due to exchange translation of property, plant and equipment resulting from the appreciation of the Australian dollar in the Australian metallurgical coal business.

Total liabilities was ¥11,567.7 billion, a decrease of ¥265.1 billion, or 2%, from March 31, 2020. Current liabilities was ¥4,904.9 billion, a decrease of ¥441.4 billion, or 8%, from March 31, 2020. This was mainly due to a decrease in trade and other payables attributable in part to decreased transaction volumes in the Steel business and the Petroleum business.

Non-current liabilities was ¥6,662.8 billion, an increase of ¥176.3 billion, or 3%, from March 31, 2020. This was mainly due to an increase in long-term borrowings due to new fund procurements.

Total equity was ¥6,231.1 billion, an increase of ¥14.2 billion, or 0%, from March 31, 2020.

Equity attributable to owners of the Parent was ¥5,247.7 billion, an increase of ¥20.3 billion, or 0%, from March 31, 2020. This was mainly due to an increase in retained earnings accumulated by profit for the period and exchange differences on translating foreign operations resulting from the appreciation of the Australian dollar despite a decrease in retained earnings as result of the payment of dividends.

Non-controlling interests decreased ¥6.0 billion, or 1%, from March 31, 2020, to ¥983.5 billion.

Net interest-bearing liabilities (excluding lease liabilities), which is gross interest-bearing liabilities minus cash and cash equivalents and time deposits, decreased ¥155.6 billion, or 4%, from March 31, 2020, to ¥4,180.7 billion.

(3) Cash Flows

Cash and cash equivalents at September 30, 2020 was ¥1,537.8 billion, an increase of ¥215.0 billion from March 31, 2020.

(Operating activities)

Net cash provided by operating activities was ¥617.6 billion, mainly due to cash flows from operating transactions, dividend income and decreases in working capital requirements due to decreased transaction volume by the impact of COVID-19, despite the payment of interests and income taxes.

(Investing activities)

Net cash used in investing activities was ¥213.9 billion. The main uses of cash were payments for the purchase of property, plant and equipment and investments and loans to affiliated companies, which exceeded such inflows as the sale of investments in affiliated companies and the sale of listed stocks.

Main items (Segments) included in investing cash flows were as follows.

3

New/Sustaining Investments

  • Investment in HERE Technologies (Other)
  • European integrated energy business (Power Solution)
  • Australian metallurgical coal business (Mineral Resources)
  • North American real estate business (Urban Development)
  • LNG-relatedbusiness (Natural Gas)
  • Copper business (Mineral Resources)

Sales and Collection

- Listed stocks (Food Industry/Consumer Industry)

As a result, free cash flows, the sum of operating and investing cash flows, was positive ¥403.7 billion.

(Financing activities)

Net cash used in financing activities was ¥191.9 billion. The main uses of cash were repayments of lease liabilities, payments of dividends and the acquisition of treasury stock, which exceeded cash provided by financing activities.

The dividends were paid in compliance with the shareholder returns policy of progressive dividends in line with sustained profit growth. The acquisition of treasury stock was carried out in consideration of the cash flows during the period of Midterm Corporate Strategy 2018 and the appropriate capital standards, and with the aim of improving capital efficiency. Regarding financing through debt, the policy is to maintain debts at an appropriate level in light of liquidity and financial soundness.

In addition to the aforementioned operating cash flows for financial accounting purpose, in order to present the source of funds for future investments and shareholder returns appropriately, Mitsubishi Corporation defined "Underlying operating cash flows (after repayments of lease liabilities)", which is operating cash flows excluding changes in working capitals whilst including repayments of lease liabilities which are necessary in the ordinary course of business activities, and "Adjusted free cash flows", which is the sum of "Underlying operating cash flows (after repayments of lease liabilities)" and investing cash flows.

Underlying operating cash flows (after repayments of lease liabilities) was positive ¥229.1 billion.

As a result, Adjusted free cash flows was positive ¥15.2 billion.

4

(4) Forecasts for the Year Ending March 2021

There has been no change to the forecasts for the year ending March 2021 announced on August 13, 2020.

Note:

Earnings forecast and other forward-looking statements in this release are based on data currently available to management and certain assumptions that management believes are reasonable. Therefore, they do not constitute a guarantee that they will be achieved. Actual results may differ materially from these statements for various reasons.

5

2. Condensed Consolidated Financial Statements

  1. Condensed Consolidated Statement of Financial Position March 31, 2020 and September 30, 2020

Millions of Yen

ASSETS

March 31,

September 30,

2020

2020

Current assets

Cash and cash equivalents

1,322,812

1,537,799

Time deposits

101,016

95,678

Short-term investments

49,331

43,748

Trade and other receivables

3,168,074

2,819,141

Other financial assets

308,468

150,798

Inventories

1,294,479

1,270,938

Biological assets

58,871

62,913

Advance payments to suppliers

45,776

59,880

Assets classified as held for sale

46,595

8,321

Other current assets

541,968

485,589

Total current assets

6,937,390

6,534,805

Non-current assets

Investments accounted for using the equity method

3,219,594

3,179,768

Other investments

1,708,071

1,719,514

Trade and other receivables

655,267

698,446

Other financial assets

134,220

106,331

Property, plant and equipment

2,248,160

2,388,950

Investment property

96,709

95,135

Intangible assets and goodwill

1,422,812

1,445,405

Right-of-use assets

1,429,288

1,440,787

Deferred tax assets

36,146

36,849

Other non-current assets

162,004

152,846

Total non-current assets

11,112,271

11,264,031

Total

18,049,661

17,798,836

6

Millions of Yen

LIABILITIES AND EQUITY

March 31,

September 30,

2020

2020

Current liabilities

Bonds and borrowings

1,472,769

1,348,184

Trade and other payables

2,547,012

2,371,938

Lease liabilities

205,780

236,325

Other financial liabilities

213,181

175,097

Advances from customers

178,689

139,423

Income tax payables

40,000

32,220

Provisions

87,564

83,816

Liabilities directly associated with assets classified as held for sale

1,167

188

Other current liabilities

600,109

517,738

Total current liabilities

5,346,271

4,904,929

Non-current liabilities

Bonds and borrowings

4,287,354

4,466,030

Trade and other payables

56,692

57,501

Lease liabilities

1,297,530

1,269,949

Other financial liabilities

40,286

51,943

Retirement benefit obligation

123,690

124,355

Provisions

162,622

170,648

Deferred tax liabilities

485,551

486,912

Other non-current liabilities

32,771

35,443

Total non-current liabilities

6,486,496

6,662,781

Total liabilities

11,832,767

11,567,710

Equity

Common stock

204,447

204,447

Additional paid-in capital

228,153

228,760

Treasury stock

(294,580)

(27,295)

Other components of equity

Other investments designated as FVTOCI

359,974

372,590

Cash flow hedges

(27,422)

(66,231)

Exchange differences on translating foreign operations

82,634

151,120

Total other components of equity

415,186

457,479

Retained earnings

4,674,153

4,384,285

Equity attributable to owners of the Parent

5,227,359

5,247,676

Non-controlling interests

989,535

983,450

Total equity

6,216,894

6,231,126

Total

18,049,661

17,798,836

7

  1. Condensed Consolidated Statement of Income for the six months ended September 30, 2019 and 2020

Millions of Yen

Six months

Six months

ended

ended

September 30, 2019

September 30, 2020

Revenues

7,723,892

5,728,347

Cost of revenues

(6,820,814)

(4,967,101)

Gross profit

903,078

761,246

Selling, general and administrative expenses

(710,983)

(687,943)

Gains on investments

26,942

16,833

Gains on disposal and sale of property, plant and equipment and others

2,287

2,904

Impairment losses on property, plant and equipment and others

(7,074)

(3,060)

Other income (expense)-net

(14,170)

(5,778)

Finance income

85,094

44,455

Finance costs

(35,585)

(24,971)

Share of profit of investments accounted for using the equity method

106,851

39,791

Profit before tax

356,440

143,477

Income taxes

(86,501)

(41,069)

Profit for the period

269,939

102,408

Profit for the period attributable to:

Owners of the Parent

242,359

86,687

Non-controlling interests

27,580

15,721

269,939

102,408

Profit for the period attributable to Owners of the Parent per share (in Yen)

Basic

154.97

58.68

Diluted

154.64

58.55

8

  1. Condensed Consolidated Statement of Comprehensive Income for the six months ended September 30, 2019 and 2020

Millions of Yen

Six months

Six months

ended

ended

September 30, 2019

September 30, 2020

Profit for the period

269,939

102,408

Other comprehensive income (loss), net of tax

Items that will not be reclassified to profit or loss for the period:

(Losses) gains on other investments designated as FVTOCI

(25,533)

31,670

Remeasurement of defined benefit pension plans

514

(210)

Share of other comprehensive income (loss) of investments accounted for using

1,780

(7,080)

the equity method

Total

(23,239)

24,380

Items that may be reclassified to profit or loss for the period:

Cash flow hedges

(9,106)

(14,959)

Exchange differences on translating foreign operations

(154,926)

79,464

Share of other comprehensive (loss) of investments accounted for using

(56,411)

(38,813)

the equity method

Total

(220,443)

25,692

Total other comprehensive (loss) income

(243,682)

50,072

Total comprehensive income

26,257

152,480

Comprehensive income attributable to:

Owners of the Parent

6,794

139,656

Non-controlling interests

19,463

12,824

26,257

152,480

9

  1. Condensed Consolidated Statement of Changes in Equity for the six months ended September 30, 2019 and 2020

Millions of Yen

Six months

Six months

ended

ended

September 30, 2019

September 30, 2020

Common stock:

Balance at the beginning of the period

204,447

204,447

Balance at the end of the period

204,447

204,447

Additional paid-in capital:

Balance at the beginning of the period

228,340

228,153

Compensation costs related to share-based payment

1,426

1,131

Sales of treasury stock upon exercise of share-based payment

(1,049)

(721)

Equity transactions with non-controlling interests and others

(1,359)

197

Balance at the end of the period

227,358

228,760

Treasury stock:

Balance at the beginning of the period

(8,279)

(294,580)

Sales of treasury stock upon exercise of share-based payment

1,706

1,100

Purchases and sales-net

(171,755)

(19,777)

Cancellation

285,962

Balance at the end of the period

(178,328)

(27,295)

Other components of equity:

Balance at the beginning of the period

914,807

415,186

Other comprehensive income (loss) attributable to owners of the Parent

(235,565)

52,969

Transfer to retained earnings

(16,503)

(10,676)

Balance at the end of the period

662,739

457,479

Retained earnings:

Balance at the beginning of the period

4,356,931

4,674,153

Cumulative effects of change in accounting policy

(9,079)

Adjusted balance at the beginning of the period

4,347,852

4,674,153

Profit for the period attributable to owners of the Parent

242,359

86,687

Cash dividends paid to owners of the Parent

(99,982)

(100,957)

Sales of treasury stock upon exercise of share-based payment

(647)

(312)

Cancellation of treasury stock

(285,962)

Transfer from other components of equity

16,503

10,676

Balance at the end of the period

4,506,085

4,384,285

Equity attributable to owners of the Parent

5,422,301

5,247,676

Non-controlling interests:

Balance at the beginning of the period

940,674

989,535

Cumulative effects of change in accounting policy

(2,677)

Adjusted balance at the beginning of the period

937,997

989,535

Cash dividends paid to non-controlling interests

(32,094)

(26,656)

Equity transactions with non-controlling interests and others

11,123

7,747

Profit for the period attributable to non-controlling interests

27,580

15,721

Other comprehensive income (loss) attributable to non-controlling interests

(8,117)

(2,897)

Balance at the end of the period

936,489

983,450

Total equity

6,358,790

6,231,126

Comprehensive income attributable to:

Owners of the Parent

6,794

139,656

Non-controlling interests

19,463

12,824

Total comprehensive income

26,257

152,480

10

  1. Condensed Consolidated Statement of Cash Flows for the six months ended September 30, 2019 and 2020

Millions of Yen

Six months ended

Six months ended

September 30, 2019

September 30, 2020

Operating activities:

Profit for the period

269,939

102,408

Adjustments to reconcile profit for the period to net cash provided by (used in)

operating activities:

Depreciation and amortization

218,672

261,855

(Gains) on investments

(26,942)

(16,833)

Losses on property, plant and equipment and others

4,787

156

Finance (income) -net of finance costs

(49,509)

(19,484)

Share of (profit) of investments accounted for using the equity method

(106,851)

(39,791)

Income taxes

86,501

41,069

Changes in trade receivables

339,843

404,734

Changes in inventories

(115,975)

37,881

Changes in trade payables

(244,601)

(169,122)

Other-net

(96,743)

(64,691)

Dividends received

182,067

108,403

Interest received

60,703

44,261

Interest paid

(47,579)

(36,892)

Income taxes paid

(114,177)

(36,311)

Net cash provided by (used in) operating activities

360,135

617,643

Investing activities:

Payments for property, plant and equipment and others

(161,442)

(194,022)

Proceeds from disposal of property, plant and equipment and others

22,149

20,747

Purchases of investments accounted for using the equity method

(79,697)

(143,504)

Proceeds from disposal of investments accounted for using the equity method

61,935

54,280

Acquisitions of businesses-net of cash acquired

130,838

5,372

Proceeds from disposal of businesses-net of cash divested

50,813

6,482

Purchases of other investments

(18,247)

(11,614)

Proceeds from disposal of other investments

74,600

57,806

Increase in loans receivable

(104,757)

(45,513)

Collection of loans receivable

39,110

33,364

Net (increase) decrease in time deposits

9,817

2,749

Net cash provided by (used in) investing activities

25,119

(213,853)

Financing activities:

Net increase (decrease) in short-term debts

172,521

64,971

Proceeds from long-term debts

174,423

601,760

Repayments of long-term debts

(235,720)

(572,887)

Repayments of lease liabilities

(130,561)

(140,866)

Dividends paid to owners of the Parent

(99,982)

(100,957)

Dividends paid to non-controlling interests

(32,094)

(26,656)

Payments for acquisition of subsidiary's interests from the non-controlling interests

(13,540)

(2,298)

Proceeds from disposal of subsidiary's interests to the non-controlling interests

6,649

4,739

Net (increase) decrease in treasury stock

(171,472)

(19,710)

Net cash provided by (used in) financing activities

(329,776)

(191,904)

Effect of exchange rate changes on cash and cash equivalents

(14,218)

3,101

Net increase (decrease) in cash and cash equivalents

41,260

214,987

Cash and cash equivalents at the beginning of the period

1,160,582

1,322,812

Cash and cash equivalents at the end of the period

1,201,842

1,537,799

11

3. Changes in Accounting Policies and Accounting Estimates

The significant accounting policies applied to the condensed consolidated financial statements for the six months ended September 2020 are identical to the accounting policies applied to the consolidated financial statements for the previous fiscal year.

4. Notes Concerning Going Concern Assumption

None

12

November 5, 2020

Mitsubishi Corporation

Results for the Six Months Ended September 2020

November 5, 2020

Mitsubishi Corporation

(Forward-Looking Statements)

  • This release contains forward-looking statements about Mitsubishi Corporation's future plans, strategies, beliefs and performance that are not historical facts. Such statements are based on the company's assumptions and beliefs in light of competitive, financial and economic data currently available and are subject to a number of risks, uncertainties and assumptions that, without limitation, relate to world economic conditions, exchange rates and commodity prices.
  • Accordingly, Mitsubishi Corporation wishes to caution readers that actual results may differ materially from those projected in this release and that Mitsubishi Corporation bears no responsibility for any negative impact caused by the use of this release.

(Notes Regarding These Presentation Materials)

- Consolidated net income in this presentation shows the amount of net income attributable to owners of the Parent, excluding non-controlling interests.

Copyright © 2020 Mitsubishi Corporation

November 5, 2020

Mitsubishi Corporation

Results for the Six Months Ended September 2020

Six months ended

Six months ended

Fluctuation

Forecasts for the year

Progress

September 2019

September 2020

ending March 2021

(Billion Yen)

Consolidated

242.4

86.7

(155.7)

200.0

43%

Net Income

Business-related sector

148.2

53.0

(95.2)

130.4

41%

Market-related sector*

90.2

26.5

(63.7)

51.6

51%

Annual dividend per share

134 yen

  • Market-relatedsector includes North American shale gas and E&P in Natural Gas segment, Mineral Resource business except for trading and business incubation in Mineral Resource segment, and Ships (commercial vessels) in Industrial Infrastructure segment.

<> fluctuation>

(Billion Yen)

  • Earnings decreased 155.7 billion yen year-over-year.
  • In the Business-relatedsector, net income decreased mainly due to lower operating income in the LNG-related business and in the Automotive-related business etc., as well as impairment losses in Mitsubishi Motors, despite the rebound from loss related to crude oil trading derivatives at the Singapore petroleum subsidiary recorded in the previous year.
  • In the Market-relatedsector, net income decreased mainly due to lower operating income in the Australian metallurgical coal business, etc.

242.4

+ 5.8

Fluctuation of

(161.5)

one-off gains/losses

86.7

Decrease of

operating income

Six months

Six months

ended September

ended September

2019

2020

(Billion Yen)

  • Consolidated net income shows signs of bottoming out, at 36.7 billion yen in the 1st quarter and 50.0 billion yen (+13.3 billion yen) in the 2nd quarter (3 months).
  • Progress of 43% against the forecast for the year due to forecasted disposal gains from asset replacements in the second half, etc.
  • Forecasts of 200.0 billion yen in consolidated net income and 134 yen annual dividend per share remain unchanged.

Business-related sector +30.0

200.0

(Automotive, Convenience store and

Salmon farming business, etc.)

Market-related sector (12.3)

113.3

(Australian metallurgical coal

business, etc.)

Forecasts for the

+13.3

50.0

3rd and 4th quarters

(6 months)

36.7

1st quarter

2nd quarter

Forecast

(3 months)

for the year

Copyright © 2020 Mitsubishi Corporation

1

November 5, 2020

Mitsubishi Corporation

Year-over-Year Segment Net Income

Consolidated Net Income Six months ended September 2019 (FY19 2Q): 242.4

(Billion Yen)

Six months ended September 2020 (FY20 2Q): 86.7[YoY (155.7)]

FY19

2Q

FY20

2Q 8.6

FY19

2Q 17.3

(0.5) FY20

2Q

FY19

(22.1) 2Q

FY20

2Q 13.5

42.9 Natural Gas [YoY (80%)]

Decreased dividend income and earnings

[(34.3)]

in the LNG-related business, etc.

Industrial Materials

Decreased earnings in the Steel business

[(17.8)]

and decreased business profit in the

Carbon business, etc.

Petroleum & Chemicals

Rebound from loss related to crude oil

[+35.6]trading derivatives at the Singapore petroleum subsidiary recorded in the previous year, etc.

FY19

2Q

(21.4)

FY19

2Q

FY20

2Q

FY19

2Q

FY20

2Q

28.4

FY20

2Q [(49.8)]

14.2

21.3 [+7.1]

15.2

2.4 [(12.8)]

Automotive & Mobility

Impairment losses in Mitsubishi Motors, as well as decreased earnings from

Mitsubishi Motors and the Asian

automotive business, etc.

Food Industry [YoY +50%]

Increased earnings in the Meat processing, manufacturing and sales business

as well as the Overseas food business, etc.

Consumer Industry [YoY (84%)]

Decreased earnings in the Convenience store business,

the Overseas apparel-related business and the Tire-related business, etc.

FY19

89.6

2Q

Mineral Resources [YoY (61%)]

FY20

35.3 [(54.3)]

Decreased market prices in the Australian

metallurgical coal business, etc.

2Q

FY19

2Q

FY20

2Q

11.3

0.9 [(10.4)]

Power Solution [YoY (92%)]

Seasonal factors from Eneco Group becoming a subsidiary and rebound from disposal gains due to sales of overseas power generating assets recorded in the

FY19

25.9

2Q

FY20

13.7

[(12.2)]

2Q

Industrial Infrastructure [YoY (47%)]

Rebound from one-off gains recorded in the previous year due to Chiyoda Corporation becoming a subsidiary, etc.

FY19

15.7

2Q

FY20

5.7 [(10.0)]

2Q

previous year, etc.

Urban Development [YoY (64%)]

Worsened fund evaluation profit and loss and decreased property disposal gains in the Real estate development business, etc.

Copyright © 2020 Mitsubishi Corporation

2

November 5, 2020

Mitsubishi Corporation

Cash Flows

Six months ended

Six months ended

September 2019

September 2020

Operating cash flows

617.6

360.1

356.3

229.1

Investing

25.1

cash flows

Underlying

operating

cash flows

(after repayments

of lease liabilities)*1

(213.9)

Adjusted Free Cash Flows*2

+381.4+15.2

[Breakdown of cash flows]

(Billion Yen)

Underlying

Investing CF

operating

Adjusted Free

cash flows

New/Sustaining

Sales and

Cash Flows

(after repayments

Net

Investments

Collection

of lease liabilities)

Ref.

Year ended

672.1

(1,051.4)

550.7

(500.7)

171.4

March 2020

Six months

ended

229.1

(389.5)

175.6

(213.9)

15.2

September 2020

[Main items included in Investing CF for the six months ended September 2020]

New/Sustaining Investments

Sales and Collection

Investments in HERE Technologies (Other)

European integrated energy business

(Power Solution)

Australian metallurgical coal business

Listed stocks

(Mineral Resources)

(Food Industry/Consumer Industry)

North American real estate business

(Urban Development)

LNG-related business (Natural Gas)

Copper business (Mineral Resources)

*1 Underlying operating cash flows (after repayments of lease liabilities) :Operating cash flows excluding changes in working capitals

(=Net income (including non-controlling interests) - DD&A - profits and losses related to investing activities - equity in earnings of affiliated companies not recovered through dividends

  • allowance for bad debt etc. - deferred tax)

whilst including repayments of lease liabilities

*2 Adjusted Free Cash Flows :Total of Underlying operating cash flows (after repayments of lease liabilities)

Copyright © 2020 Mitsubishi Corporation

and Investing CF

3

November 5, 2020

Mitsubishi Corporation

(Reference) Market Conditions

[Foreign Exchange, Commodity Prices and Interest Rates]

Six months

Forecast for

Consolidated Net Income Sensitivities

ended

the year

Fluctuation

for the year ending March 2021

September

ending

[For crude oil and copper price, preliminary sensitivities

2020

March 2021*

at this time are shown for reference, since there is a possibility of

significant revision due to changes in production levels etc.]

Foreign

106.93

105.90

+1.03

Depreciation/appreciation of 1 yen per US$1 has a 1.5 billion yen

Exchange

positive/negative impact on a full-year earnings.

(YEN/US$)

A US$1 rise/decline per barrel increases/reduces full-year earnings by

2.5 billion yen.

To better account for the differences in fiscal year-ends of consolidated

Crude Oil Price

companies and the timing when crude oil price is actually reflected in

(Dubai)

57

47

+10

LNG sales price, the average price for the preceding 6 month period (e.g.

For the year ending March: average price from Oct. to Sep.) is utilized.

(US$/BBL)

In addition to changes in crude oil price, other factors could also affect

crude oil-related earnings, such as dividend policy, foreign currency

movements, and production/sales volume. Therefore, the impact on

earnings cannot be determined by the crude oil price alone.

A US$100 rise/decline per MT increases/reduces full-year earnings by

1.3 billion yen (A US¢10 rise/decline per lb increases/reduces full-year

Copper Price

5,956

6,276

(320)

earnings by 2.8 billion yen).

(US$/MT)

In addition to changes in copper price, other variables affect earnings

from copper mines, such as the grade of mined ore, the status of

[US /lb ]

[ 270 ]

[ 285 ]

[ (15) ]

production operations, and reinvestment plans (capital expenditure).

Therefore, the impact on earnings cannot be determined by the copper

price alone.

YEN Interest

0.07

0.09

(0.02)

TIBOR 3M

(%)

The effect of rising interest rates is mostly offset by an increase in

operating and investment profits. However, a rapid rise in interest rates

US$ Interest

0.42

0.37

+0.05

could have a temporary negative effect.

LIBOR 3M

(%)

  • The annual averages are shown for the forecast for the year. Revised from the forecast released on Aug. 13 based on price changes. (Crude oil price is the actual result, as the price for the preceding 6 months period is utilized.)

Copyright © 2020 Mitsubishi Corporation

4

Disclaimer

Mitsubishi Corporation published this content on 05 November 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 05 November 2020 09:56:03 UTC


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Technical analysis trends MITSUBISHI CORPORATION
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TrendsBullishBullishBullish
Income Statement Evolution
Consensus
Sell
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Number of Analysts 10
Average target price 2 840,00 JPY
Last Close Price 2 683,50 JPY
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Spread / Average Target 5,83%
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EPS Revisions
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NameTitle
Takehiko Kakiuchi President & Representative Director
Ken Kobayashi Chairman
Kazuyuki Masu CFO, Representative Director & Head-Corporate
Akira Murakoshi Director, Chief Digital Officer & Head-Personnel
Akihiko Nishiyama Independent Outside Director
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