Mitsubishi Corp. Predicts Record Net Profit

Mitsubishi Corp. has raised its full-year net profit forecast by 21% to a record 1.03 trillion yen ($7 billion).

Originally, the company’s May outlook forecasted profits of 850 billion yen. The latest forecast aligns with a mean estimate of 1,08 trillion yen in a Refinitiv poll of 10 analysts.

The company cites strength in metals and energy segments because of higher prices of coking coal and liquefied natural gas (LNG) as the reason. For the April-September first half of the year, net profit nearly doubled to a record 720 billion yen, buoyed by a rally in coking coal and LNG and the sale of a real estate management company.

Japanese trading houses have seen benefits from surging oil, gas and coal prices since Russia’s invasion of Ukraine.

“In addition to metals and natural gas, which captured the tailwind of market condition, strong profits are expected to come from other segments, including automobiles, electric power solutions and general materials,” Mitsubishi Chief Executive Katsuya Nakanishi said at a news conference.

He added that “downside risks are also factored in for the second half of the financial year, taking into account concerns about a slowdown in the global economy.”

Mitsubishi also raised its annual dividend forecast to 155 yen per share from its earlier guidance of 150 yen and announced a plan to buy back its own shares worth up to 70 billion yen, putting the total payout ratio at 28.7%.

“We will consider additional shareholder return, taking into account our total payout ratio target of 30-40%,” Nakanishi said.

Competitors—Mitsui & Co., Marubeni Corp., Sumitomo Corp. and Sojitz Corp.—also raised their annual earnings forecasts to record profits, all backed by the yen’s fall against the U.S. dollar.