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Mitsubishi Posts Best Quarter Since 2011 on Yen, Stock Gains

Mitsubishi Corp. (8058), Japan’s largest trading house, recorded its best quarter since the three months ended June 30, 2011, as a weaker yen helped sell more autos in Asia and a domestic stock rally boosted equity holdings.

Net income jumped 47 percent to 132.7 billion yen ($1.35 billion) in the quarter ended Sept. 30 from 90 billion yen a year earlier, Tokyo-based Mitsubishi said in a statement today. First-half profit was 248.4 billion yen, beating the 234.6 billion yen mean forecast from three analysts compiled by Bloomberg.

Mitsubishi and Mitsui & Co. (8031), the nation’s two largest trading companies, forecast in May that a weakening of the Japanese currency may add almost $1 billion to profit this year. The yen’s decline has helped inflate U.S. dollar-based commodity sales while the run-up in Japanese stocks bolstered the value of domestic equity investments.

Mitsubishi, which adds 2.5 billion yen to profit with every 1 yen drop against the greenback, made 76 billion yen on the rising value of listed stocks from April to October. The Japanese currency has declined 11 percent against the U.S. dollar this year.

Lower costs and rising volumes at Mitsubishi’s Australian coal mines, most of which are part of a joint venture with BHP Billiton Ltd. (BHP), helped boost earnings at the Japanese trader’s mining unit by 71 percent to 22.8 billion yen.

“Coal prices may have hit a bottom in the three months through September,” Chief Financial Officer Shuma Uchino said in Tokyo today. “However, the uptrend in prices is taking more time than we imagined.”

Mitsubishi’s machinery division, which sells autos and other equipment, contributed the biggest boost to operating profit. Net income at the unit rose 19 billion yen in the first half to 50.6 billion yen thanks to the weaker yen and Asian sales, the trader said.

To contact the reporter on this story: Yuriy Humber in Tokyo at yhumber@bloomberg.net

To contact the editor responsible for this story: Jason Rogers at jrogers73@bloomberg.net

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