ITOCHU posts record $1.86b Q1 net profit as non-resource earnings grow

Core profit climbed 38% as non-resource businesses contributed 85% of the total.

Japan's ITOCHU Corporation posted record first-quarter (Q1) earnings as stronger performance from its non-resource businesses lifted profit across all operating segments, whilst the company maintained its full-year earnings forecast.

Consolidated net profit rose 3% year on year to $1.86b (JPY293.8b) in the quarter ended 30 June, marking a record Q1 result for the second consecutive year.

Core profit increased 38% to a record $1.58b (JPY249.5b), with non-resource businesses contributing $1.34b (JPY211.5b), or 85% of the total.

The company kept its full-year consolidated net profit forecast at $6.03b (JPY950b), whilst its Q1 results represent 31% of the annual target, and core profit reached 28% of its $5.71b (JPY900b) forecast.

Machinery recorded the largest increase in core profit, rising $119.3m (JPY18.8b) to $287.5m (JPY45.3b), supported by higher earnings from Hitachi Construction Machinery, Tokyo Century, North American power operations, and the shipping business.

Metals & Minerals increased core profit by $81.2m (JPY12.8b) to $294.4m (JPY46.4b) on higher iron ore and coal prices, improved operations at two coking coal projects, and foreign exchange gains.

Energy & Chemicals increased core profit by $65.4m (JPY10.3b) to $189.1m (JPY29.8b), driven by stronger chemicals operations and improved profitability at ITOCHU ENEX, although lower energy transaction volumes and the deconsolidation of CIECO Azer weighed on results.

Food, ICT & Financial Business, Textile, General Products & Realty, and The 8th also reported higher core profit.

ITOCHU revised its full-year net profit forecasts for the Machinery segment to $1.40b (JPY220b) from $1.14b (JPY180b) and for Energy & Chemicals to $707.7m (JPY111.5b) from $479.1m (JPY75.5b), reflecting extraordinary gains and stronger Q1 performance.

(US$1 = JYP157.59)