Japan's Mitsui lifts full-year profit guidance on weaker yen
TOKYO, Oct 31 (Reuters) - Japan's Mitsui & Co posted on Tuesday a fall of 15% in first-half net profit, but raised its full-year forecast on solid performance in its automobile business, with a weaker yen currency expected to boost gains from overseas assets.
The business of trading houses was under pressure in the year's first half as commodity prices eased from their peaks of 2022, when supply chains were disrupted following Russia's invasion of Ukraine.
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Mitsui, which has stakes in two liquefied natural gas (LNG) projects in Russia among other businesses worldwide, reported a profit of 456.3 billion yen ($3 billion) for the six months ended Sept. 30.
That was down from 539.1 billion yen a year ago, hurt by lower prices of fossil fuels and steel-making materials such as iron ore.
The company raised its forecast for the year to next March to 940 billion yen from 880 billion earlier, supported by the yen's decline and stronger performance expectations for its LNG and machinery and infrastructure segments.
Mitsui, also a shareholder in a multi-billion-euro LNG development project in Mozambique frozen in 2021 over security problems, hopes to restart construction soon as the situation has improved, Chief Financial Officer Tetsuya Shigeta said.
"We are ready to discuss with contractors on the premise of resuming construction," Shigeta told a news conference. "It's hard to predict the timing of restart, but I feel it's getting closer."
Upbeat guidance allowed Mitsui, in which U.S. investor Warren Buffet recently increased his stake, to raise its full-year dividend forecast to 170 yen per share, up 30 yen on the year, and to buy back up to 12.5 million of its own shares.
Mitsui said 170 yen per share would be the minimum level of its annual dividend from now until the end of March 2026.
Its smaller peer, Sojitz, also saw net profit falling by 39% to 48 billion yen in the first half and kept its full-year forecast unchanged at 95 billion yen.
Lower fuel prices supported Japanese utilities, among which players from JERA, Tokyo Gas and Kansai Electric Power to smaller peers Hokuriku Electric Power and Tohoku Electric Power posted healthy first-half profits. ($1=150.1100 yen) (Reporting by Katya Golubkova and Yuka Obayashi; Editing by Varun H K and Clarence Fernandez)