Japan's top five trading houses report bumper profits

The top five trading houses of TOKYO Japan reported bumper profits in the first quarter thanks to higher prices of coking coal, oil and liquefied natural gas LNG, as well as strong demand for steel products and automobiles.

Like their global rivals in energy and mining, Mitsubishi, Mitsui Co and other trading houses have benefited from the rally in the energy and commodities markets.

The biggest gainer was Mitsubishi whose first quarter net profit almost tripled to 534 billion yen $4 billion, followed by Marubeni Corp whose profit increased 80 per cent, Sumitomo Corp with a 45 per cent jump and Mitsui with a 44 per cent jump.

Itochu Corp saw a 14 per cent decline due to smaller one-off gains than a year earlier.

The rising inflation worldwide, China's slowing of economic growth and recent drops in some commodities, such as coking coal and copper, may limit future profit growth, executives warned.

There is growing uncertainty due to a global economic slowdown, falling resource prices, a prolonged Russia-Ukraine conflict and global monetary tightening, according to Mitsubishi Chief Financial Officer Yuzo Nouchi.

Marubeni's strong first-quarter results led to 50 per cent progress on its full-year profit estimate.

There is an extremely uncertain business environment in the second quarter and beyond, which is why we are keeping our annual profit forecast, Chief Financial Officer Takayuki Furuya said.

He said that we need to look at how natural resource prices will move and how slowing demand and higher raw material costs will affect profits in the manufacturing sector and trading margins.

Marubeni said on Friday it slashed the value of its stake in the Sakhalin 1 oil project in Russia by 8 billion yen to 3 billion yen at the end of June.

Mitsui and Mitsubishi have cut their stakes in the Sakhalin 2 LNG project by 217.7 billion yen after Moscow's move to seize control of it.

A table of net profit for the first quarter in April-June is provided by Japan's top five trading houses. The yen is worth billions of yen.