Get 40% Off
🚀 Our AI Picked 6 Stocks that Jumped +25% in Q1. Which Picks Will Soar in Q2?Unlock full list

Japan's Itochu raises profit forecast on strong machinery business

Published 11/05/2023, 11:23 PM
Updated 11/06/2023, 02:20 AM
© Reuters. The logo of Itochu Corp is seen outside the company's headquarters in Tokyo, Japan, November 7, 2016. REUTERS/Toru Hanai/File Photo

(Reuters) -Japanese trading house Itochu posted a 14.5% drop in six-month net profit on Monday but raised its full-fiscal year profit forecast on stronger expectations for its machinery business and the weaker yen.

Other big Japanese trading houses, including Mitsui, Mitsubishi, Marubeni and Sumitomo, also raised their forecasts last week on the weaker yen and non-resource businesses after a drop in half-year results.

Itochu increased its net profit forecast for the year ending in March 2024 by 20 billion yen to 800 billion yen ($5.4 billion) after weaker coal and iron ore prices resulted in its half-year net profit falling to 412.90 billion yen.

"We have raised our full-year profit forecast for the machinery segment, backed by strong performance of automobile, construction machinery and North America's power business," President and Chief Operating Officer Keita Ishii told a news conference.

The full-year profit forecast for Itochu's machinery business -- its second-biggest profit contributor after the metals and minerals segment and which makes ship and car parts and industrial machinery -- was increased by 10 billion yen to 115 billion yen.

Itochu, which has a higher exposure to China than other top Japanese trading houses, believes it will take a while for the Chinese economy to recover, Ishii said.

"It does not look that China's economy will pick up quickly with Beijing's stimulus. We will have to endure it a little bit more," Ishii said.

© Reuters. The logo of Itochu Corp is seen outside the company's headquarters in Tokyo, Japan, November 7, 2016. REUTERS/Toru Hanai/File Photo

The company also said it will buy back up to 1.2% of its shares, worth 75 billion yen.

Itochu's shares closed 1.66% higher on Monday but underperformed the wider Nikkei index, which was 2.37% higher. ($1 = 149.5600 yen)

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.