Marubeni Corp
TSE:8002
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Marubeni Corp
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I would like to start my presentation on consolidated financial results for the third quarter of fiscal year ending in March 2020 and the full year forecast.
First, adjusted net profit, which is net profit excluding onetime items, was JPY 174 billion, a decrease of JPY 16 billion or 8% year-on-year. On the other hand, net profit was JPY 145.6 billion, a decrease of JPY 74 billion or 34% year-on-year due to onetime losses recorded in the quarter. Adjusted net profit decreased by JPY 16 billion. This is due to the decrease in non-resources by JPY 21 billion, which more than offset the increase in resources of JPY 7 billion. As for onetime factors, we had a positive JPY 29 billion last year, mainly generated by the valuation gain resulting from the consolidation of ARTERIA Networks Corporation as a subsidiary, whereas this year, we had a negative JPY 29 billion due mainly to the impairment recorded in the oil and gas business. So the net effect is the deterioration of JPY 58 billion. Full year net profit forecast for fiscal year ending in March 2020 was revised down JPY 40 billion from JPY 240 billion to JPY 200 billion. On the other hand, adjusted net profit forecast is JPY 234 billion.
Next, I will discuss core operating cash flow. It was JPY 273 billion positive. Free cash flow after delivery of shareholder returns was also positive JPY 17.4 billion, resulting in a net D/E ratio of 0.89. For the D/E ratio, the -- on a full year basis, the forecast was revised from 0.8 to 0.9 as a result of additional interest acquisition of Aircastle incorporated in the plan, and the free cash flow after shareholders' return is projected at 0. The closing of Aircastle transaction is expected to be completed by the end of June 2020. If closing takes place on or after April 1, 2020, unlike our current assumption of the end of March, net D/E ratio should improve or decline by 0.06. Despite the downward revision of earnings from JPY 240 billion to JPY 200 billion, annual dividend forecast is kept unchanged from our original guidance at the beginning of the year at a minimum JPY 35 per share. So that's the level we would like to maintain.
Next, I will discuss segment results for the first 9 months. I will focus on those segments with major changes in adjusted net profit. First, Forest Products down JPY 6 billion to JPY 5 billion mainly due to decreased profit of the pulp business, caused by a fall in pulp prices. Food is up JPY 4 billion to JPY 18 billion due to absence of the grain trading-related loss last year and increased profit of the U.S. beef packer Creekstone. The Agri business is down JPY 5 billion to JPY 15 billion mainly due to the flood which occurred in the United States in early spring, the U.S.-China trade friction and the weaker fertilizer business. Chemicals is down JPY 4 billion to JPY 5 billion due to the deterioration in the trading environment during the first quarter. The Power business is down JPY 8 billion to JPY 20 billion year-on-year due to decreased profit caused by divestment of assets as well as absence of fee revenues we had last year as a result of the closing of IPP projects. Energy is down JPY 6 billion to JPY 17 billion due to falling oil and gas prices. Metals are up JPY 13 billion to JPY 47 billion due to the increase in iron ore prices.
Last, but not least, let me make some comment on dividends. Some of you may be concerned about the possible decrease in dividend for fiscal year ending in March 2021 after we've announced a downward revision for the earnings for fiscal year ending in March 2020. Since we are announcing the earnings and dividend forecast for fiscal year ending in March 2021 in May, I cannot make specific comment in this meeting today. However, we are fully aware of the concern of our shareholders and the investors, and therefore, we'll take action to address the situation.
With this, I would like to conclude my presentation. Thank you for your kind attention.
[Statements in English on this transcript were spoken by an interpreter present on the live call.]