Marubeni Corp
TSE:8002
If you don’t study any companies, you have the same success buying stocks as you do in a poker game if you bet without looking at your cards.
Utilize notes to systematically review your investment decisions. By reflecting on past outcomes, you can discern effective strategies and identify those that underperformed. This continuous feedback loop enables you to adapt and refine your approach, optimizing for future success.
Each note serves as a learning point, offering insights into your decision-making processes. Over time, you'll accumulate a personalized database of knowledge, enhancing your ability to make informed decisions quickly and effectively.
With a comprehensive record of your investment history at your fingertips, you can compare current opportunities against past experiences. This not only bolsters your confidence but also ensures that each decision is grounded in a well-documented rationale.
Do you really want to delete this note?
This action cannot be undone.
| 52 Week Range |
1 966.5
3 138
|
| Price Target |
|
We'll email you a reminder when the closing price reaches JPY.
Choose the stock you wish to monitor with a price alert.
This alert will be permanently deleted.
Marubeni Corp
You don't have any saved screeners yet
Thank you very much for joining us today. I am Nobuhiro Yabe, CFO of Marubeni. I'd like to now present the consolidated financial results for the third quarter of fiscal year ending March 2018.
Please refer to a sheet of paper, which is the IFRS-based financial highlights of consolidated financial results for the third quarter and yearly forecast for fiscal year ending March 2018.
Let me start with net profit. Net profit increased by JPY 57.1 billion or 53% year-on-year to JPY 164.8 billion. As for the breakdown of the increase of the profit, in non-natural resources, the Transportation & Industrial Machinery, including the aerospace and also the Forest Products and livestock business, were the drivers, pushing up the profit by JPY 22.5 billion. In natural resources, due to the higher commodity market, the profit increased by JPY 34.6 billion. Those numbers include the impact from the U.S. tax reform, which is about JPY 6 billion on the positive side as a company as a whole.
Now this number, JPY 164.8 billion, is the record high net profit number as a cumulative number of the Q1 through Q3. For your reference, the highest net profit until now was JPY 160.2 billion recorded at -- in the fiscal year ended March 2014.
Looking at the adjusted net profit, which is included in IR supplementary information, the onetime loss during Q1 to Q3 was JPY 3 billion. Based on our analysis, excluding that, adjusted net profit was JPY 168 billion. In the previous year, adjusted net profit was JPY 130 billion. In comparison to that, the net profit increased by JPY 38 billion.
Now the breakdown of this JPY 38 billion increase. In nonnatural resources, it was JPY 11 billion. And in natural resources, it was JPY 27 billion. In natural resources, out of the JPY 27 billion increase, JPY 19 billion is in relation to the prices. The remaining JPY 8 billion is not related to prices. So out of JPY 38 billion, JPY 19 billion or half is priced-related in natural resources and the remaining is not related to the prices.
Now let's look at the full year forecast of the net profit. Up to Q3, as I mentioned, net profit was JPY 164.8 billion. And based on that, we reviewed our yearly forecast. And as a result, we have revised the full year forecast to JPY 200 billion.
In the current midterm management plan, the final year is the fiscal year ending March 2019. Our net profit target of JPY 200 billion will be achieved a year earlier.
As a result of the upward revision based upon our dividend policy of paying more than 25% of the consolidated payout ratio, we are increasing the dividend forecast from JPY 25 per share to JPY 29 per share for yen increase. We already paid interim dividend of JPY 12.5. Therefore, the year-end dividend is going to be JPY 16.5 per share. For your reference, this dividend of JPY 29 per share is the highest. In the past, JPY 26 per share was the highest in the fiscal year ended March 2015.
Now let me go into the details of the income statement, starting with the gross trading profit. This increased by JPY 38.4 billion year-on-year to JPY 500.3 billion. It increased in Energy & Metals, Chemicals & Forest Products and Transportation & Industrial Machinery
Now let me explain the major nonoperating items. The dividend income increased by JPY 1.9 billion year-on-year to JPY 14.1 billion due to the increase of energy-related projects. Gains on investment securities of an associate company in ICT-related business led to the increase of JPY 9.1 billion to JPY 11 billion.
As for gains on property, plant and equipment, since there was an impairment loss in relation to the oil and gas development business last year, this improved JPY 46.6 billion year-on-year to JPY 3.6 billion.
As for other, there were losses associated with overseas infrastructure business and others. As a result, other profit was minus JPY 13.6 billion.
Turning to share of profits of associates and the joint ventures. Mainly due to the higher profit of the copper business in Chile and coal business in Australia, the share of profits increased by JPY 26.1 billion year-on-year to JPY 113.4 billion. Out of the JPY 6 billion impact from the U.S. tax reform, half of that, the JPY 3 billion, is in this item. As a result of this, profit before tax increased by JPY 58.9 billion year-on-year to JPY 208.3 billion. Net profit, as I mentioned, increased by JPY 57.1 billion to JPY 164.8 billion. The remaining impact of the JPY 3 billion from the U.S. tax reform is in relation to the tax.
Now let me go into the operating segments, starting with Food & Consumer Products. There was a recognition of gains on sale of investment securities of an associate company in ICT-related business. And also, there was an improvement of the livestock business. In addition, there was an impact of the U.S. tax reform, which was JPY 18 billion. As a result, the net profit increased by JPY 15.8 billion to JPY 61.1 billion.
Next, going to Chemical & Forest Products. As the market condition of pulp improved, the Forest Products' profit increased and there was a JPY 5 billion impact from the U.S. tax reform. Net profit increased JPY 6.9 billion to JPY 33.8 billion.
In Energy & Metals, there was a reactionary improvement from year earlier impairment loss on oil and gas development business and also there was a share of profits of the copper business in Chile and coal business in Australia, which has improved. The profit improved by JPY 36.6 billion year-on-year to JPY 8.2 billion. This actually includes the JPY 25 billion worsening of the corporate income tax due to the U.S. tax reform.
In Power Business & Plant, there was a share of profit increase from the offshore businesses and also the impact from the U.S. tax reform of about JPY 4 billion. Despite that, there were losses associated with overseas infrastructure business and profit decreased by JPY 10.2 billion to JPY 33.6 billion.
Finally, the Transportation & Industrial Machinery, there was a reactionary loss from the sale of an automotive sector business in North America last year. In aerospace, ships, automobile, construction machinery, the adjusted net profit increased. And in addition to this, there was a JPY 4 billion positive impact from the U.S. tax reform. As a result, profit increased by JPY 3.4 billion to JPY 34 billion.
Despite the working capital increase, the cash flow from operating activities was positive at JPY 88.1 billion, thanks to the solid net profit and also growing adjusted operating cash flow.
As for cash flow from investing activities, due to the capital expenditure for the overseas businesses, it was minus JPY 71.4 billion. As a result, the free cash flow was JPY 16.7 billion on the positive side. This fiscal year's target is JPY 100 billion surplus after the dividend payment. We would generate cash flow in Q4, and we are likely to achieve the yearly target.
Now let me turn to the balance sheet. Including the noncontrolling equity, the total equity increased JPY 194.4 billion to JPY 1,937.1 billion with higher profits. Net interest-bearing debt increased JPY 83.7 billion to JPY 2,183.7 billion. As a result, net debt-to-equity ratio was 1.13x. Compared with the end of the last fiscal year, it was an improvement of 0.07. Compared to September, it was an improvement of 0.05. At the end of March this year, we keep the target of 1.1x unchanged.
So that is the overview of Q3 financial results.
Lastly, I'd like to mention 2 topics. First of all, in relation to Gavilon in terms of the numbers up to Q3, excluding the impact from the U.S. tax reform, Gavilon grain business net profit is about the same as that of last year. We had the major deficit in ag trading, which turned positive this year, so we saw an improvement. But unfortunately, in global, the earnings in Brazil has worsened, which have offset the improvement. The major origination business in the United States is flat year-on-year.
For the full year forecast, we expect a slight decrease in comparison to last year.
Another topic is what we mentioned in the second quarter earnings meeting, that is concerning the impairment loss risk of oil and gas-related businesses. At the end of Q3, we have reviewed all the projects with our CPA. And as a result, we have booked all the necessary items in this quarter. So that means that, in Q4, we do not expect any impairment loss in relation to the oil and gas-related businesses.
With that, I end the presentation. We will continue to work on the further reinforcement of the financial foundation as well as evolving business strategy. But looking at the Q3 results, I think we can say we are doing well and making good progress. Thank you for your attention.