2024-08-02 03:12:32 ET
Summary
- Mitsui & Co. fiscal Q1 results are slightly behind ratable plan delivery. LNG prices and integration of new investments in targeted growth areas have been headwinds.
- These businesses should turn around in the second half to help deliver the plan, but falling iron ore prices are a risk.
- Mitsui stock performance and valuations have been in the middle to low end of peers so far this fiscal year.
- The healthy balance sheet and cash generation look sufficient to cover planned dividends and buybacks.
- Considering the slow start and iron ore price risk, the stock remains a Hold.
Fiscal Q1: A Little Behind Plan
Mitsui & Co. ( OTCPK:MITSY ) ( OTCPK:MITSF ) was one of the 4 Japanese trading companies to report Fiscal 2025 Q1 earnings this week. Itochu ( ITOCY ) ( ITOCF ) follows on 8/5. As I discussed last quarter , Mitsui's FY 2025 plan is for ¥900 billion net income, a lower result than FY 2024 actuals, after several years of commodity-led growth. The company also planned to have ¥1 trillion of core operating cash flow this year. The actual Q1 results show that Mitsui delivered 22% of the annual core operating cash flow plan in Q1, a bit under ratable delivery of 25%. Progress against the profit target was 31%, but this was due mostly to gains on sale of two businesses in the Machinery & Infrastructure segment. Without these gains, profit also would have been around 22% of the annual plan....
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For further details see:
Mitsui: Off To A Slow Start
