EXTRACT: In September, Russia intervened in the Sakhalin-2 oil-and-gas project led by Royal Dutch Shell PLC that also involved Mitsubishi and Mitsui. The government has accused Shell of violating environmental standards and threatened to pull its permits.
THE ARTICLE
By ARRAN SCOTT
November 1, 2006
TOKYO — Japanese trading companies Mitsubishi Corp. and Mitsui & Co. yesterday posted sharp increases in first-half net profit and forecast stronger results amid booming commodities prices.
Mitsubishi, Japan’s biggest trading company by revenue, posted a group net profit of 234.83 billion yen ($2 billion) for the six months ended Sept. 30, up 32% from 178.31 billion yen in the year-earlier period, on strong earnings from metals trading and its coal business in Australia. Group revenue was up 9.1% to 9.836 trillion yen.
For the full year ending March 31, Mitsubishi raised its estimate for group net profit to 400 billion yen from 370 billion yen and for group revenue to 20 trillion yen from 19.2 trillion yen.
The country’s second-largest trading company by revenue, Mitsui, said first-half group net profit nearly doubled to 159.17 billion yen from 83.19 billion yen. It cited rapid earnings growth at its metals and energy businesses. Group revenue rose 8.1% to 7.622 trillion yen.
Mitsui boosted its group-net-profit forecast for the full year to 300 billion yen from 240 billion yen, but it left unchanged its estimated group revenue of 15 trillion yen.
The results mirror strong gains at Japan’s third- and fourth-ranked trading houses, Itochu Corp. and Marubeni Corp. The four companies may face some difficulties, however, as Japan’s ambitious 25-year plan to sharply increase oil-and-gas development hits some hurdles.
In September, Russia intervened in the Sakhalin-2 oil-and-gas project led by Royal Dutch Shell PLC that also involved Mitsubishi and Mitsui. The government has accused Shell of violating environmental standards and threatened to pull its permits.
Itochu and Marubeni have a stake in the Sakhalin-1 project via their holdings in Sakhalin Oil & Gas Development Co. Russia also is probing the Sakhalin-1 project.
Write to Arran Scott at [email protected]
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