Mitsui Falls After Forecasting First Loss in Almost 70 Years

  • Impairment charges include Browse LNG project in Australia
  • Trading house reports 260 billion yen in one-time charges

Japanese trading company Mitsui & Co. fell after it booked more than $2 billion in impairment charges and forecast its first net loss in its modern history.

The company fell as much as 8.2 percent to 1,290 yen on Thursday, the biggest drop in intraday trading since Sept. 29, by 11:55 a.m. in Tokyo. Mitsubishi Corp., Japan’s largest trading company, fell as much as 6.4 percent to 1,873 yen after the Nikkei newspaper reported the company may book 400 billion yen ($3.55 billion) in impairment losses.

Mitsui expects a net loss of 70 billion yen in the fiscal year ending March after booking 260 billion yen in one-off charges, including impairments on the Browse LNG project in Australia and the Caserones copper development in Chile, according to a statement Wednesday. Mitsui previously forecast net income of 190 billion yen.

The global commodity slump is squeezing the balance sheets of Japan’s general trading companies like Mitsubishi, Mitsui and Sumitomo Corp., which invested in metals and energy only to see prices fall.

Almost every major raw material is worth less now than two years ago when the commodity slump began. The Bloomberg Commodity Index, a measure of returns from 22 raw materials, has tumbled about 40 percent over the period, touching the lowest level since 1991 in January.

Mitsui will maintain its dividend of 64 yen for the current fiscal year, the company said in a statement on Wednesday. The company indicated on a conference call it’s considering cutting next year’s dividend, analysts at JPMorgan Chase & Co. wrote in a March 24 note.

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