In This Article:
Release Date: May 11, 2017
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Marubeni Corp (MARUF) reported an increase in total equity by JPY 343.9 billion, reflecting strong capital accumulation and hybrid finance operations.
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Net interest-bearing debt decreased by JPY 322 billion, improving the net debt-to-equity ratio by 0.56 points to 1.39x.
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The company experienced a positive free cash flow of JPY 119.9 billion, indicating strong cash management.
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The Transportation & Industrial Machinery segment saw a net profit increase of JPY 9.1 billion year-on-year, driven by gains from the sale of an automotive sector business and increased profits in aircraft-related businesses.
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Marubeni Corp (MARUF) raised its yearly profit forecast from JPY 130 billion to JPY 140 billion, supported by rising coal and copper prices and expected gains from a photovoltaic power generation project.
Negative Points
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Net profit for the period decreased by JPY 14.1 billion to JPY 107.7 billion, indicating a decline in overall profitability.
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Gross trading profit decreased by JPY 59.8 billion year-on-year, impacted by yen appreciation.
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The Energy & Metals segment faced challenges with LNG and oil and gas development operations, leading to a gross trading profit decline of JPY 8 billion year-on-year.
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The Food & Consumer Products segment saw a gross trading profit decrease of JPY 13.9 billion due to changes in subsidiary status.
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Chemical & Forest Products experienced a gross trading profit decline of JPY 23.5 billion, affected by yen appreciation and worsening margin conditions in woodchip and pulp businesses.
Q & A Highlights
Q: Can you provide an overview of Marubeni's financial performance for the third quarter? A: Nobuhiro Yabe, CFO, explained that the net profit for the period decreased by JPY 14.1 billion to JPY 107.7 billion. The total equity increased by JPY 343.9 billion, while net interest-bearing debt decreased by JPY 322 billion. The net debt-to-equity ratio improved to 1.39x.
Q: How did market conditions affect Marubeni's performance? A: Yabe noted that the WTI crude oil price decreased by $2 per barrel, and the copper price was down by $463 per tonne. The yen appreciated by JPY 15.06 against the U.S. dollar, impacting the company's financial results.
Q: What were the key factors affecting the operating results by segment? A: In the Food & Consumer Products segment, gross trading profit decreased due to a subsidiary becoming an associate company. The Energy & Metals segment saw a decline in profitability due to weaker LNG and oil and gas operations, despite stronger coal pricing. The Transportation & Industrial Machinery segment benefited from gains on the sale of an automotive business in North America.