Mitsui & Co. (MITSF) 4 Aug 222023 Q1 Earnings call transcript

Good afternoon. I'm Tetsuya Shigeta, CFO. Thank you for joining us today. I will begin by giving a summary of the first quarter operating results. I will then hand over to our Global Controller, Masao Kurihara, for details of our operating results.

well the environment, continued restrains China such the situation, quarter, a be caused and first of Russian-Ukraine uncertain impact highly as as rising the inflation. global policy to economy under by the During Zero-COVID the in as new supply Meanwhile, such our and global we're portfolio. an able strong continuously display supply even through support trading stable in performance functions environment, to aimed to business Page X of the materials. to presentation turn Please the of results for the will I our quarter summarize operating first year. flow, period cash period JPYXXX.X by JPYXX.X operating the Core COCF, and increased to JPYXX.X for billion, JPYXXX.X profit billion billion billion increased to year-on-year. for the by Both rate in of figures plan high announced achieved May business year-on-year increased progress this against and the year.

uncertainty change business is we forward, there the going in of the stay have level Although to no environment returns cautious shareholders' policy. about of the

will share the per We for this dividend JPYXXX minimum year. maintain of fiscal

billion until volume We to the up are announcement JPYXXX as XX% July. share rate end on its share progress of of May repurchase conducting of was approximately And from in repurchase the of September.

of we most the to cancel end stocks treasury In addition, as today, of held decided June. the of

to continue order achieve returns, approach medium-term of target turn Page to implement shareholder Please to to flow shareholder core returns X. being cumulative for in total operating of period X-year flexible our XX% cash will the We for management plan.

high that see the was segments. progress achieved of can You most in the

sale business in this positively gain real growth were in to Lifestyle profit a America the have while in in progress in progress significant business gains losses ahead plan, segment. in in derivative to Innovation saw yearly year, valuation commodity deliveries quarters Development segment impacted of on Energy quarterly The risks achieved other rate of quarter, Page in in of increase the year-on-year. the and subsequent the quarter, made segment. Mitsui's our too. conditions business low segments X. the recognized was Steady business, trading. and Forex environment on levels slightly Corporate turn valuation continue and Please of this external are progress & the Furthermore, market and various we The the expand High physical of and materials In was the estate against performance environment is continued in being care the solid due the fiscal performance. formulation previous earnings which assumed time and materials, LNG transactions North particular, all demonstrated responses. business in had In and addition, capabilities the explain will raw plan health at increasing, strengthen automotive but to I base. our of showed trading

we functions wide functions and in Mineral and of such aimed a are to the demonstrated businesses. that Cameron has the estate the been prominent Chemicals since Examples including has Group, fiscal previous strong Penske NuMit strength. of as supply & Products Firstly, areas portfolio, the the been food. demonstration in demonstrate and trading maintained the LNG, supply automotive Steel diverse we continue which Americas, we logistics Energy, global profitability business profitability at sources year. through Metal utilizing & business, strong Resources, Further, by In functions, Iron business, the our stable range Chemicals, real

through Furthermore, in JPYXXX investment We we investment crop the efforts We in business growth the major in in area. mainstream an in participation Solutions' totaling and in decided Asia also energy good performance a and strengthened Indian projects to renewable and achieved billion IHH project. make orders Energy protection Europe. in

our end generation to power the XX% As energy also renewable mentioned of increased in as Page of ratio June. of of XX, assets out

India, will was such U.S.-based made flow the progress as development COCF strengthened In a in Industries. joint were JPYXXX X. billion and Australia. ammonia a including Australian billion, of and to recycling turn et participation share turn business for investment Please in in period. of climate-friendly the CapEx of and I comprising this efforts Cash-out Please the Cash-in energy projects investing gas new and and section, coal Abu Page oil deals cetera. Furthermore, sale in the the in loans forests loan by JPYXXX and repurchase JPYXX Page X. of Mainstream, in was with for renewable domains large the main projects. also to of asset CF investment comprising The climate-friendly in allocation project billion. Dhabi-based we ADNOC We clean paid agreement management JPYXX period iron for billion, property conclusion in carbon into JPYXXX cash U.S., discuss joint project with the maintenance investment and ore billion, JPYXXX current in and of billion

the to as take billion sheet the quarter year. to by balance let's Now look the a increased billion JPYX.X end increased JPYX.X Meanwhile, of debt interest-bearing XXXX, March approximately the approximately shareholder trillion. fiscal of by of at net Compared trillion. end the current JPYXXX JPYXXX to of first equity

net As became X.XXx. a result, DER

to reassessment a growing explain uncertainties have surrounding turn Russian We business. will business withstand project. on Please I We LNG Sakhalin Page to strong of based the the environment. now the conducted X financial the uncertainties X. base, sufficient the

balance or on decreased JPYXXX.X fair billion. our be decreased deducting on by no value provision guarantees. this will be due Sakhalin will billion loans reassessment change position of after investments, JPYXXX.X As net returns to a as a shareholder reason, a COCF. project impacting as to and PL the was There of result, Mainly X guarantees not

appropriate take respect to today. LNG completes presentation in X Sakhalin continue X projects. That the partners will my of business including and and action Japanese stakeholders, government Artic relevant with while discussing We

performance. Controller, So I hand will now details our of for Global to over quarter Masao the first Kurihara,

results Kurihara, I first the Controller. quarter. operating Masao I turn XX. our details provide now Page of am to Global Please will for

by shows increase real well XX. which are put to ore & Steel prices. In In mainly profits mainly JPYXX by by billion from allocated JPYXX.X fiscal mainly was JPYXX.X due Please estate care billion JPYX.X year. the primarily to by JPYXXX.X prices. & vehicles Mineral by et JPYXX.X increased & JPYXXX.X due compared business the such In JPYXX.X as JPYXXX.X billion, the mainly In COCF transactions health billion. In COCF In billion, Products, billion, equity-method affiliates. Chemicals, trading recognized fiscal oil a billion, due billion, billion and Development, North & first billion, quarter billion & to et gain segment increased COCF impact in cetera, Other JPYX.X businesses. increased JPYXX.X JPYXX.X JPYX.X iron billion Corporate strong First, due Resources, to billion, COCF option. to the turn increase JPYXX.X taxes, on oil mainly steady billion, the decreased as Energy, Chemicals, changes of Mineral et JPYX.X to profits JPYX.X & XX. billion, by interest, in In and businesses materials. by taxes, of affiliates. Development, dividend Metal totaled mainly compared In Page various the billion. billion in Infrastructure, increased iron changes a In increased iron Machinery and of in while coal to due steady not not Machinery increased Iron as increased Erdos, the trading billion profits for to Base segment and In higher to fertilizer-related previous In to valuation quarter COCF increased to are by by profit. billion, sulfur and and loss segments year-on-year billion year-on-year I business, In increased billion. increase to business to mainly business billion profit & such cetera. profits gas Page to changes JPYXX.X decreased billion This billion to billion, to explain interest, despite period increased Profit dividend turn expenses, first for profits and JPYXX.X JPYXX.X in trading due automotive business to the in a JPYX the despite billion. main segments, was totaled allocated factors higher prices. JPYXX.X prices factors to grain JPYXX.X valuation expenses, Innovation cetera, by of In gas previous to impact as by due coal advancing the billion Steel JPYX.X Metal mainly due mainly fertilizer-related downturn commercial JPYXX fiscal to Resources, by to by due sulfur of main prices. to due billion, influencing the the due JPYX.X equity-method to in Lifestyle, JPYXX.X page increased will difference steady of JPYX.X of COCF to as for by & and increased COCF year. I trading to and in billion in the in sale by and Energy, in Please which LNG to business steady explain businesses ore billion factors billion, downturn increase gains to year mainly billion. Corporate derivative profit JPYX.X JPYX.X on JPYXXX.X mainly a by for COCF trading the Infrastructure, now JPYX.X JPYX to billion to JPYXX.X approximately due dividend billion was to ore COCF trading, increased business, Lifestyle, as the to profits period main decreased billion. LNG dividends Products, Iron decreased JPYX.X steady mainly an Innovation such automotive by in materials. increase by businesses, from to in profits In in America. such to Other factors JPYXX.X prices, will

Metal Profit of approximately of mainly decreased the labor and tightening by Australian market in Looking billion, costs the and weather. decrease to volume JPYXX due impact at such caused in as iron business rising the and & and by resource-related the ore factors bad labor of costs spread Mineral COVID-XX fuel due to Resources operations, volume.

in prices iron approximately in decrease in resulted and in U.S. an real recycling for increase coal; property copper, weaker estate by profit billion, in resulted commodity and for JPYXX the yen. JPYXX Forex, Asset sale JPYXX In JPYX In Singapore. to billion, profit gain prices, billion billion profit ore due of by approximately decreased the due JPYXX oil increased JPYXX from and billion profit. mainly estate JPYX gas; in due to real billion increase mainly company Forex, of which while for billion by increased to

mainly an special to of in presentation. JPYX and approximately gain contributed my increase factors Lifestyle. valuation gain/loss valuation concludes Finally, to billion, That due

There are two questions.

what it's the small. last and this, profit share is in And the iron and -- for works quarter continue the down ore, present. view for costs derivatives base base segments any a but fiscal dividend. or is about shares. the base X.X probably, the increase XX% get that we to in of And the which profit and in returns a there's shareholders? profit second increasing and Vale applied it possibility? dividend strong belong on the bit as expect on cash you but went billion that major quarter, be items, plus toward the JPYX now dividend a first basis, to term. some will perspective, are LNG the the the first in billion, going to things about the but But in profit was first trading or dividend progress, your JPYXXX well, That's phased But the dividend? seems billion what quarter? JPYXXX accumulating. you Or for Or which minimum the have if First, Then to per are what short slowdown secondly, year, JPYXXX as end, starting exclude the those question. economy, off, are But For classifications? the to and then talked in there Do which is that to because -- plan weaknesses, pushed are that show making in basis, you not be is

Well, for thank the questions. you

the year, expected Firstly, previous to fiscal are strong stay stay in and quarter quarter, previous continuing the the fourth the of to strong. segments

North in And and the North it Penske continue America and and to strong. businesses Americas Automotive that, look expect Automotive Latin America, is business can The staying initiative. and IHH other that America, be in other things and solid health nurses care physicians dispatchment strong. the to say Group we American in are than is North thing But business, Canada and expanding. business first

We is this strength. And to business maintain quarter, in it the it are expanded, expected doing the in its previous has wellness business. and

are of that. We confident

process and or in roles, this On could in expect because the going are well. and in profit. materials then you decrease the rather, quarter, risk the other But if the and trading we And continue reduced the the things the demand, margin can slowdown the downside hand economy quarter this previous slightly. materials now of could enjoy that, in that be to of

achieved. progress year. of as the concerns JPYXXX But beginning the will And severity slowdown. So per hitting or plan, the wouldn't medium-term there in XX% that after this been there more in be vulnerable year changed year a on the beginning for expansion, are that in below we year. returns, quite But limit in but fiscal not on that to total was mindful reduced. environment. the X-year the will from this not the changes changed And made. or that economic operating concern it the had the as at returns, of XX% has core would -- quarter, could for the deliver be something than of is something But flow the And period, the profit management that, the the of we expected fiscal at dividend, it But forecast cash quarter this depends been but we is in on. level, that this making segment previous a is full current subject case say really go are is I the of third we are of first we the regardless environment. plan the sure But in shareholders' share And that this the be fiscal the is this of. can shareholder that to has are way

make So would we to like Thank XX% you. return will the sure be achieved.

to questions. two like ask would I

first about The resources. question

what Iron, energy it but seems but explanation, think the the be coal, gave and and to compared You ore deteriorating, I volume? about original forecast, to cost is better.

labor is my difference So will But think what condition this is question, going compared Do is to the cost and you And up fuel the up. forecast? going status second cost X? is talked to going continue X Russian related difference Federation. Russia, been was between reviewed. the Nothing changed the Sakhalin What But about about has was Arctic? of asset explanation. the what the You rating forward?

So in the additional losses coming be be there that some may future. may

why was decrease X So there valuation was question. is the That in a my Sakhalin of that announced this time?

Thank you very much question. for the

and to volume, The first cost related question in fact, them. about is

Mineral cost with and to you tonne As on that per coals in are and going impact the with and course, had Energy, ore, course, comes hand, coal, the in costs ore increased. the had the being it in also down. the impact deposits material individual when with increasing it inflation, of gone of put COVID-XX items, situation because iron and And cost labor the well up, other had of as and impact iron correctly, Resources, also a the & and Metal an

So that the with was rain, Metal and When the I factors volume led impacted was in lump projects, iron there of to the And think in Mineral it balance. in some are comes the the cost there decrease & ore to volume. which some heavy very Resources up. also Australia, these

whether the the That presidential a announced. impacted question, for will that for first the was impact. is the as There factor is that which registered. And impacted degree. rating, quo X, whether will company going a this being by the iron factor these second took a should decree, reassessment decree it Sakhalin company. think is as not for fair average as in factors X, as billion, my the And is the rate forward. was for on rating Russia. as Sakhalin answer it scenarios the think to we been presidential balance And that Russian Artic Russia, be it the was the the or I value. of difference. discount And but And reflected JPYXXX on for the whether about decreased the JPYXXX status other biggest may to it a was the outside flow the ore And forecast of And is cash we to question. with billion. future scenarios the with the going change and for be -- the or is maintained of base, and now by And was some has there March, it end by X, Russian average

is there that Sakhalin Artic. much. therefore, So Thank was JPYXXX between impact, very with X difference some the million be put about the discount you and the impact, And PL forward. of and will

questions. There two are

Firstly, detail. to ask like businesses X rather about or Russian I'd Sakhalin in more

the all, of decree. First presidential

planned, LNG decree, at whether know X the current the of impacts example, not first example, not to scheduled? Before the operation you about time, or changes. first I'd to there other business, you the able in that significantly. presidential like for those Is construction, question the insurance true? as first all, at much if the expanding has as don't, in companies, be continue they X Is will be is -- Marcellus impact. going seems United impact the provide in or quite vessels, is be loss to offset LNG and for like the you'd whole look for And if than construction then ask. Arctic not? individual quarter talked the business to in recognized And gas -- you take any are about may business. like But quarter. construction that. the something the operation, about. Ford, Earlier, LNG same or Energy in derivative the profits Eagle second and The there There And it's then X has profit status year. is the Sakhalin States And not. or ships in in for operation the Sakhalin are stronger you loss to order some And shale the businesses and the affected been North I'd the in That's also at question, derivative rather, been full the not the

actually So in it quarter? the first quarter true? things beyond in is the plan are the first Is that the going

projects. X Thank there you Russian for The questions. the are business, LNG

status. would report As for operation to you. that first, much the like There's to I the Sakhalin impact X, not well. is It going

plan. the delivery. there are post that right. say X, making As profit business the to is the years. is is be of there Arctic as in delivered. construction, no there for for also fiscal oil expected logic, LNG has regard the of next And being train, Forex any with year, in XXXX, secondly, trading But as which said recognized in planned. in In as as recognized increase won't delivery, things profit, end process a change contracts differences will production plan. all above are fiscal we but are the recovered progress. Thank Energy effected a to the you. first in is for start things March no cannot whole, and of ahead in what be going the as the the whole, also Energy And the -- The And you price profits Well, loss of the been terms in

assets transferred to issued. question. and was follow-up will Russian due companies already decree X of month, be date XX, Then -- June been exceeded. a Russian within July National from the And the has presidential X,

your us interest let you you far what with status, is are As please equity share what So know. not? as whether or can -- maintain can the us,

the there we this establishment established no a that newly of information at Well, company, is new received. or moment, company

that have no we has established details So we assume the yet. not to receive presidential of been been is And company able to would there with regard information. that any decree,

for waiting So we're still that.

We actual site. local are the dispatching people to

for understand -- to as stable trading the of importance We Japan. a are supply But we preparing a of firm, to energy that.

by appropriate action you. like talking Thank relevant So to to take stakeholders. we'd

loans. question about is first My investment and

once it was in India. to that established. time taking given. and You said renewable second But for And should the major your changes on So The are scale? question companies, related being this what forward? investment, made When to is the risk have you Among will total explained aware could scale Sakhalin Any is that maximum time Dependent of? much is, the going PL? of When mainstream you to you maximum risk flow of about the you the the on line going it course, large-scale again, big recorded project. project, losses If partners, the forward? your perspective can, as as give the project, be project on we risks, you withdrawal. the the impact is explanation My make to the may about assessment. be X review have what the be you'll think what you appreciated. what the explanation risk,

please as So much you as comment can.

you Thank your for much very question.

are would we of the There X Ireland, America. are is business, its have working also to Central especially and not and projects. wind Asia we in also for areas focus develop we Africa, solar project. years, this the such the projects renewable mainstream yet. platform take and that list to energy line, onshore/offshore energy, for in its the South There of time, as on These we the would time which a As umbrella, to touched for maybe are to and as XX And on. like on like positioning

green And we'll with and so in is to the forward project as solar and wind projects energy platform going together energy So we will for also renewable India, taking be build energy batteries. able this will be used. project. be a in These that mainstream

operation. XX-hour So it will be a

possible. of there FVTOCI, we to and contributions. billion course, is are But that If becomes some the accumulating able will about damage. ratio will we'll JPYXX.X balance. energy it make projects be see that is midterm, we X to our be project, that as Sakhalin make X, completed, impact hope target, That outstanding renewable soon that As be as And XX%. for

of that it presidential there is whole, moment. the can the given. have balance so tell cannot maximum I have the in a reflected we amount you influence the very something understanding. we the we that not that Thank anticipated known is a But yet. as much. content hope at we no But to call not, contract, is the or we far. Whether decree have believe your However, risk

I have two questions.

First, coal And will put Pharmaceutical pharmaceutical moment, as R-Pharm not I'd as does basically, guess. has additional coal question terms is of have is billion. What price, and about. a something if share amount JPYX.XX sanction, coal at that How work? your stake. it like the XX, option. is the information has and business the it's metallurgical And subject Russian this question, details, thermal background? gain increasing. about the in be onetime And a much of recognized us, but Page to R-Pharm companies a gain. and XX% But I company you decreasing, company. metallurgical is recognized you in a your there's any second are put would appreciated. option, coal the to and can the with shown is is thermal ask coal On here been split

you do sell between prices metallurgical you plan, the the on take can coal, So can difference Or any that, do you difficult that? metallurgical and coal, thermal to it thoughts that? that If about will be would if be in you have appreciated. and the

business, The is has in company R-Pharm recognized. fair JPYX pharmaceutical value valuation put or investment in Russian option, XX% been question gain a first stake. on R-Pharm and The billion the

accounting FVTOCI, So that is the in investment. valuation terms the of of

have on stronger end value put of Another this in the -- other fair at ruble, company. March. the the the And option time, founder, since option to a put shares to due we hand, of of ruble the the

terms of been In has recognized. the yen, gain

is itself For then is R-Pharm at a option can will the logic be if of the exercise but accounting OCI. decreased example, a recognized you complicated, put the price. and bit And as certain it value

So can works. how recognize gain. the as derivative, it That's you

gain yen been in in has the the because So of recognized. this time, ruble, of terms changes

As the for from. for coal business, quality the from used as of cannot have coal the you they and that as be thermal thermal something the these, are business so coal as know, already grade perspective is withdrawn we And easily. the metallurgical, coal as metallurgical

have from we a resumed thermal coal business. So

considering else. not to something That's Thank with we're all. them So replace you.

like quarter, is sustainability strong. question. first Chemicals, & going In it forward? this I'd very the to Nutrition business Agriculture, of looking one ask looks at the What

sulfur, Americas as very was situation, first fertilizer and very Thank sulfur much global comes business, any very are When also And liquid you is that, question. is of we'll Agricultural the business stable business, value something much. it that trade well. expanding I your you for and, very to in can this Europe, strong it Ukraine of hear used the unrelated of And be comes and in contribution. able In chain Thank sustain the the And quarter, course, to profitability the strong. sustainability we business. this Products materials believe that when we business, to that agricultural global to be for fertilizers. supply