Tokyo, May 8, 2009 - (JCN Newswire) - Mitsubishi Corporation (TSE: 8058) has announced consolidated financial results for the year ended March 31, 2009.
Consolidated operating transactions in the fiscal year ended March 31, 2009 totaled 22,389.1 billion yen, down 713.9 billion yen, or 3.1%. This decrease was due to a rapid drop in commodity prices and declining transactions amid a deteriorating real economy. Gross profit was 1,463.2 billion yen, climbing 290.9 billion yen, or 24.8%, mainly reflecting the impact of higher sales prices at an Australian coking coal business, and new consolidations. Selling, general and administrative expenses increased 44.4 billion yen, or 5.4%, year on year to 865.5 billion yen, mainly due to new consolidations and increased pension expenses at the parent company.
Other P/L items collectively had a major negative effect on earnings. One reason was a large deterioration in the gain (loss) on marketable securities and investments-net account due to the write-down of marketable securities available for sale to reflect lower stock prices. There was also a deterioration in foreign exchange gains and losses of overseas subsidiaries commensurate with gross profit associated with volatile forex movements and an increase in losses on property and equipment-net mainly because of impairment losses on property and equipment.
As a result, income from continuing operations before income taxes decreased 164.3 billion yen, or 29.7%, to 388.2 billion yen.
Net equity in earnings of affiliated companies rose 1.8 billion yen, or 1.1%, year on year to 156.8 billion yen, with strong performances at overseas resource-related companies negated by impairment losses on assets at affiliated companies.
Accordingly, we posted consolidated net income of 369.9 billion yen, down 100.9 billion yen, or 21.4%, year on year.
I. Summary of Consolidated Fiscal 2009 Results (US GAAP)
Operating Transactions and Income (millions of yen)
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FY Ended FY Ended
3/31/2009 3/31/2008
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Operating transactions 22,389,104 23,103,043
Operating income 588,896 355,105
Income from consolidated operations
before income taxes 388,228 552,549
Net income 369,936 470,859
Net income per share (yen) 225.24 283.82
Net income per share (diluted)(yen) 224.75 282.55
Return on equity (%) 14.1% 16.3%
Pre-tax income to total assets ratio 3.4% 4.8%
Operating income to total operating
transactions ratio 2.6% 1.5%
------------------------------------------------------------------------
Assets and Shareholders' Equity
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Total assets 10,918,003 11,750,441
Shareholders' equity 2,383,387 2,873,510
Ratio of shareholders'
equity to total assets 21.8% 24.5%
Shareholders' equity per share 1,450.72 1,750.86
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Cash Flows
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Operating activities 550,441 319,068
Investing activities (691,216) (356,659)
Financing activities 650,546 69,472
Cash and cah eqiuvalents end of year 1,215,099 750,128
------------------------------------------------------------------------
Prospects for the Year Ending March 31, 2010
------------------------------------------------------------------------
Operating transactions 17,000,000
Operating income 230,000
Income from consolidated operations
before income taxes 240,000
------------------------------------------------------------------------
II. Segment Information
1) Business Innovation Group
In fiscal year ended March 31, 2009, the Business Innovation Group pushed ahead with the development of businesses in high-growth industries that have significant benefits for society to create future earnings streams. The Business Innovation Group's businesses include new energy and the environment, medical healthcare, ICT (information and communications technology) and media consumer businesses.
The segment recorded a net loss of 4.3 billion yen, a decrease of 5.3 billion yen from last fiscal year's consolidated net income. This was the result of selling, general and administrative expenses accompanying business expansion and higher upfront expenses resulting from increased investments.
2) Industrial Finance, Logistics & Development Group
The Industrial Finance, Logistics & Development Group is developing shosha-type industrial finance businesses. These include merchant banking and M&A businesses such as asset management and buyout investment; asset finance and business development businesses such as leasing businesses and real estate funds; and businesses in other fields including real estate development, ownership and management, and logistics services and insurance.
The segment recorded a net loss of 41.2 billion yen, 65.4 billion yen worse than the previous fiscal year. This was the result of share write-downs, and lower fund investment and real estate-related earnings.
3) Energy Business Group
The Energy Business Group, in addition to developing and investing in oil and gas projects, conducts trading activities in areas such as crude oil, petroleum products, liquefied petroleum gas (LPG), liquefied natural gas (LNG), and carbon materials and products.
The segment posted consolidated net income of 82.8 billion yen, a decline of 11.4 billion yen from the previous fiscal year, despite higher dividend income and equity in earnings of overseas resource-related business investees due to higher crude oil prices in the first half of fiscal year ended March 31, 2009. The overall decline in segment consolidated net income principally reflected impairment losses on property and plant at overseas resource-related subsidiaries.
4) Metals Group
The Metals Group trades, develops businesses and invests in a range of fields. These include steel products such as steel sheets and thick plates, steel raw materials such as coking coal and iron ore, and non-ferrous raw materials and products such as copper and aluminum.
The segment recorded consolidated net income of 216.7 billion yen, up 58.4 billion yen year on year. Segment consolidated net income rose mainly due to higher sales prices at an Australian resource-related subsidiary (coking coal), although the segment recorded share write-downs, lower dividend income due to falling resource prices and a drop in Metal One Corporation's earnings.
(5) Machinery Group
The Machinery Group trades machinery in a broad range of fields, in which it also develops businesses and invests. These fields extend from large plants for producing essential industrial materials, including electricity, natural gas, petroleum, chemicals and steel, to equipment and machinery for transportation and distribution industries, including ships, trains and automobiles. It is also active in the aerospace and defense industries, and in general industrial equipment and machinery, including construction machinery, machine tools, and agricultural machinery.
The segment recorded consolidated net income of 17.7 billion yen, down 50.4 billion yen year on year. While ship charter fee income increased, the overall decrease in earnings was attributable to impairment losses on property and equipment and share write-downs, lower sales and the impact of forex fluctuations in overseas automobile operations, and other factors.
6) Chemicals Group
The Chemicals Group trades and invests in the commodity chemicals and functional chemicals fields. Commodity chemicals include petrochemicals, olefins and aromatics, methanol, ammonia, chlor-alkali, fertilizer and inorganic chemicals. Functional chemicals include plastics, functional materials, electronic materials, food ingredients, and fine chemicals.
The segment recorded consolidated net income of 26.8 billion yen, down 7.9 billion yen. The lower segment consolidated net income reflected the absence of tax benefits from a higher equity interest in a petrochemical business-related company in fiscal year ended March 31, 2008 and lower earnings on transactions at overseas subsidiaries.
7) Living Essentials Group
The Living Essentials Group provides products and services in wide-ranging fields related to foods(commodity), foods(products),textiles and general merchandise. These fields extend from the procurement of raw materials to the consumer market.
The segment posted consolidated net income of 32.8 billion yen, 18.1 billion yen lower year on year. The lower earnings were mainly due to share write-downs and lower equity in earnings of general merchandise-related business investees because of lower sales and other factors.
III. Outlook for Fiscal Year Ending March 31, 2010
We are forecasting consolidated operating transactions of 17,000.0 billion yen, 5,389.1 billion yen down on fiscal year ended March 31, 2009 due to an expected drop in transaction volumes because of falling commodities markets and a deteriorating real economy. Gross profit is forecasted to decline 353.2 billion yen to 1,110.0 billion yen due to lower coking coal prices and other factors. Combined with the fact that selling, general and administrative expenses are projected to remain on a par with fiscal year ended March 31, 2009, operating income is forecasted to decline 358.9 billion yen to 230.0 billion yen. In other items, we are forecasting lower dividend income and equity-method earnings from business investees, although it is expecting an improvement in gain (loss) on marketable securities and investments-net given the share write-offs booked in fiscal year ended March 31, 2009.
As a result, "Consolidated net income attributable to Mitsubishi Corporation"* is projected at 220.0 billion yen, a decrease of 149.9 billion yen year on year. Projections are based on the following assumptions.
* Consolidated net income attributable to Mitsubishi Corporation is equivalent to consolidated net income through fiscal year ended March 31, 2009.
Reference: Change of basic assumptions
FY2010 (Est.) FY2009 (Act.) Change
Exchange rate 100.0 JPY/US$1 100.7 JPY/US$1 -0.7 JPY/US$1
Crude oil price 50.0 US$/BBL 81.8 US$/BBL -31.8 US$/BBL
Interest rate(TIBOR) 0.70% 0.82% -0.12%
Note: Earnings forecasts and other forward-looking statements in
this release are management's current views and beliefs in accordance
with data currently available, and are subject to a number of risks,
uncertainties and other factors that may cause actual results to
differ materially from those projected.
IV. Changes in Assets, Liabilities and Shareholders' Equity
Total assets at March 31, 2009 were 10,918.0 billion yen, down 832.4 billion yen from March 31, 2008. While cash and deposits increased as we secured liquidity to ensure it could weather turmoil in financial markets, the decrease reflected lower trade receivables in line with falling commodities prices and other factors. Another factor was a decrease in unrealized gains on listed shares at the parent company and other entities.
Total liabilities were 8,229.5 billion yen, down 313.0 billion yen from March 31, 2008, despite interest-bearing liabilities increasing as we raised funds to ensure it was prepared for financial market instability. The overall decline was principally the result of lower trade payables in line with falling commodities prices as well as lower long-term deferred income taxes due to the decline in unrealized gains on listed shares.
Interest-bearing liabilities (net), which are interest-bearing liabilities (gross) minus cash, cash equivalents, and time deposits rose 129.3 billion yen to 3,551.2 billion yen from March 31, 2008. The net debt-to-equity ratio, which is net interest-bearing liabilities divided by total shareholders' equity, was 1.5.
Total shareholders' equity decreased 490.1 billion yen to 2,383.4 billion yen from March 31, 2008, despite the consolidated net income result. The decrease was due principally to a decline in net unrealized gains on securities available for sale resulting from a decrease in unrealized gains on listed shareholdings, as well as to a decrease in foreign currency translation adjustments because of the yen's appreciation.
V. Cash Flows
Cash and cash equivalents at March 31, 2009 were 1,215.1 billion yen, up 465.0 billion yen, or 62.0%, from March 31, 2008.
(Operating activities)
Net cash provided by operating activities was 550.4 billion yen. Cash was chiefly provided by increased cash flows from transactions at resource-related subsidiaries and firm growth in dividend income from business investments, mainly resource-related companies. Another factor was a decline in working capital requirements.
(Investing activities)
Net cash used in investing activities was 691.2 billion yen. In addition to cash used for the purchase of additional shares in Chiyoda Corporation and Mitsubishi UFJ Lease & Finance Company Limited via subscription to a private placement, cash was used for the acquisition of new rights in a coking coal project by an overseas resource-related subsidiary.
As a result of the above, free cash flow, the sum of operating and investing cash flows, was a negative 140.8 billion yen.
(Financing activities)
Net cash provided by financing activities was 650.5 billion yen. One of the main uses of cash was for the payment of dividends at the parent company. The net cash inflow, however, reflected fund procurement to meet increased requirements new investments etc., as well as to ensure we were prepared for financial market instability.
VI. Basic Policy Regarding the Appropriation of Profits
(1) Investment Plans
We plan to invest in the resources and energy fields, which we expect to remain key earnings drivers, as well as corporate development fields (including New Energy & the Environment), which we see as future sources of earnings. We will also invest in the finance, machinery, chemicals, living essentials and other fields. All investments will be made with the aim of sustaining our growth.
Given the major deterioration in the macroeconomic environment due to the worldwide economic crisis that began as a financial crisis in the U.S. in September 2008, we have partially revamped its investment plans. For the time being, we will prioritize its financial soundness. Regarding new investments, in principle, we will realign its existing asset portfolio.
(2) Capital Structure Policy and Dividend Policy
Our basic policy is to sustain growth and maximize corporate value by balancing earnings growth, capital efficiency and financial soundness. For this, we will continue to utilize retained earnings for investments to drive growth, with the aim of achieving average ROE of at least 15% over the medium and long terms.
However, given the backdrop of the persistent economic crisis since last year, we will give utmost priority to maintaining our financial soundness among the three aforementioned targets.
In terms of our dividend policy, our basic policy is to increase the annual dividend per share through earnings growth. However, comprehensively considering recent changes in the global investment environment, and to answer shareholders' expectations for a stable dividend, among other factors, we plan to reward shareholders by raising the targeted consolidated payout ratio from 20% to between 20% and 25%. We will also purchase treasury stock flexibly depending on earnings growth, progress with our investment plans and other factors.
Although consolidated net income at 369.9 billion yen was lower than the forecast announced in January this year, the Board of Directors today passed a resolution setting a dividend per common share applicable to fiscal year ended March 31, 2009 of 52 yen, the same as previously forecast. (The interim dividend applicable to fiscal year ended March 31, 2009 was 36 yen per share, making the year-end dividend 16 yen per share.)
In accordance with the aforementioned policy, we plan to pay a dividend of 34 yen per share for fiscal year ending March 31, 2010, providing we achieve our current consolidated net income (*) forecast of 220.0 billion yen and thereby raise the dividend payout ratio to 25%.
*Refers to "Consolidated net income attributable to Mitsubishi Corporation" which is equivalent to consolidated net income through fiscal year ended March 31, 2009.
For Reference: Annual Ordinary Dividends
Fiscal year ended March 31, 2003 = 8 yen per common share
Fiscal year ended March 31, 2004 = 12 yen per common share
Fiscal year ended March 31, 2005 = 18 yen per common share
Fiscal year ended March 31, 2006 = 35 yen per common share
Fiscal year ended March 31, 2007 = 46 yen per common share
Fiscal year ended March 31, 2008 = 56 yen per common share
Fiscal year ended March 31, 2009 = 52 yen per common share
About Mitsubishi Corporation
Mitsubishi Corporation (TSE: 8058; ADR: MSBHY) is Japan's largest general trading company (sogo shosha) with over 200 bases of operations in approximately 80 countries worldwide. Together with its over 500 group companies, Mitsubishi Corporation employs a multinational workforce approximately 55,000 people. The Group has long been engaged in business with customers around the world in virtually every industry, including energy, metals, machinery, chemicals, food and general merchandise. Mitsubishi Corporation's commitment to social responsibility is embodied in its corporate philosophy and demonstrated through its extensive programme of cultural, environmental and educational projects worldwide. For more information, please visit www.mitsubishicorp.com .
Contact:
Mitsubishi Corporation
Public Relations Office
Tel.: +81-3-3210-2104
Fax.: +81-3-3210-2104
May 8, 2009
Source: Mitsubishi Corporation
Mitsubishi Corporation (TSE: 8058) (FTSE: MBC)
From the Japan Corporate News Network
http://www.japancorp.net
Topic: Press release summary
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