Marubeni Corporation TSE:8002
Marubeni : Q&A of briefing on Financial Results for Q3 of FYE 3/2026 has been uploaded.
Source: MarketScreener
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<1st questioner>
Regarding copper business, profits in the third quarter alone amounted to 18.3 billion yen, with profit level soaring due to favorable market conditions. I also understand that the price increase of gold, a byproduct, which leads to cost reductions, is another factor pushing up the profit level. While the prices of gold and copper rose further in the fourth quarter compared to the third quarter, assuming the current price levels of copper and gold continue, I would like to know the expected profit level in the fourth quarter as an indicator for the next fiscal year.CFO Furuya: Regarding the copper market assumptions, as disclosed on page 14 of the IR materials, the latest forecast of the copper price for this fiscal year is approximately
$10,500 per ton for the full-year. In addition, a sensitivity of approximately 1.5 billion yen per $100/ton for copper is also disclosed. If the current price level of between $12,000 and $13,000 per ton continues, profit growth can be expected next fiscal year. As for gold, a by-product, specific figures are withheld due to confidentiality, but if the current market price continues, profit in the next fiscal year is expected to exceed this fiscal year.
Regarding the additional 12.0 billion yen from the improvement of existing businesses on page 4, the initial forecast was to accumulate 35.0 billion yen, but this time it has fallen to 12.0 billion yen. I would like to know from which businesses the downward revision has occurred, the main factors, and what measures you plan to take for the next fiscal year and how confident you are in making improvements.CEO Omoto: Regarding the improvement of existing businesses, there is a mix of increases and decreases. Pages 3 and 4 list the pluses and minuses for each business compared to the previous year's results. The forecast has been revised upward significantly for Aviation Aftermarket and Asset Trading Business, and the Mobility Business in North America, which are the Strategic Platform Businesses, as well as for Wellfam Foods and MacroSource from Food & Agri Business. On the other hand, the areas with profit declines were chemical trading, construction machinery, and Creekstone.
As countermeasures, in chemical trading, since we own and operate vessels, we will optimize vessel operations to improve profitability. For construction machinery, we will recover by increasing sales, as well as expanding sales of peripheral parts and services. Regarding livestock business, there are slight signs of improvement in the current situation, and we expect it to improve toward fiscal year 2026 and 2027. Additionally, we
are maximizing improvements in profit margins and productivity, and we aim to recover through these efforts.
To put the improvement of existing businesses from a different perspective, the businesses where the improvement is going well amount to about 45.0 billion yen. Conversely, the difference between 45.0 billion yen and 12.0 billion yen is from the businesses that have decreased profits. However, this is caused by temporary factors of this fiscal year, and about 13.0 billion yen of this will definitely not carry over to the next fiscal year. Additionally, SmartestEnergy had a one-off gain of 8.0 billion yen in the previous year, so we will aim for the effect of improvement totaling approximately 12.0 billion yen + 8.0 billion yen + 13.0 billion yen in the next fiscal year, and we will continue our efforts to improve existing businesses.
I understand that the last part of the explanation is about factors that will lead to an increase in profits over the next fiscal year, with the negative effects shrinking, but what is the main reason for the decrease of 13.0 billion yen?CEO Omoto: Although not stated in the presentation material, there are one-time factors amounting to about 13.0 billion yen this fiscal year, such as the partial suspension of MHP and TEL operations due to equipment failures and extended maintenance in IPP business, so we will take measures.
Overall, is it fair to say that, in addition to the 13.0 billion yen that has declined this fiscal year due to temporary factors being recovered next fiscal year, there will also be improvements in chemical trading, construction machinery, and Creekstone reflecting the improvement of existing businesses next fiscal year?CEO Omoto: That is correct. We started at 35.0 billion yen at the beginning of this fiscal year, and it became 12.0 billion yen at the end of the fiscal year. The difference between the 35.0 billion yen and 12.0 billion yen is classified into temporary factors for this period and businesses where measures should be taken, such as chemical trading and Creekstone. We will firmly address what needs to be closed within this fiscal year, take necessary steps for chemical trading, construction machinery, livestock, etc., and aim to improve and exceed 30.0 billion yen from improvement of existing businesses the next fiscal year onward.
<2nd questioner>
Amid the mid-term management strategy's final year profit target of more than 620.0 billion yen, although there will be an absence of one-time items recognized this fiscal year, the market conditions, including copper, are generally rising, and it seems that the hurdle for profit growth in the next fiscal year is lowering. Including asset replacement, how do you currently view the certainty of profit growth?CEO Omoto: Regarding the next fiscal year, based on the current assumptions of FX rates and commodity prices, I believe, as you pointed out, that the likelihood of increased profits in the next fiscal year is rising. We are currently in the process of formulating the initial forecast, looking at factors such as FX rates and commodity prices for the next fiscal year, improvement of existing businesses, and growth investments. As shown on page 12 in the pipeline, factors related to growth investments, including approved projects, have been accumulating to a certain extent. With the effects of growth investments and asset turnover gains associated with asset replacements, we have the feeling that we can aim for a sufficient profit increase in the next fiscal year.
Helena struggled a bit in the first half of the year, but made a reasonable profit in the third quarter. At the previous IR Meeting, it was explained that the resumption of US soybean imports by China was a positive factor, and there were expectations for the next fiscal year. The fertilizer market is also recovering somewhat, so I would like to hear your outlook on the current situation and for the next fiscal year, especially the first quarter.CEO Omoto: Looking at the three months of the third quarter, operating profit in US dollars was roughly the same as the same period last year. Although we struggled a bit in the first half due to weather conditions and other factors, recovery is underway in the third quarter. Considering that China purchased US soybeans due to the US-China agreement, that the Trump administration has clarified $12 billion in support for farmers, and that support measures for farmers under the One Big Beautiful Bill Act will be implemented, we expect the business environment of this calendar year to improve slightly compared to the previous calendar year. There are also reports that spring fertilizer demand remains firm, so we hope things will improve compared to this fiscal year.
<3rd questioner>
The full-year forecast for the Mobility Business in North America, one of your Strategic Platform Businesses, has been revised slightly downward compared to the previous forecast as of November 2025. The external environment appears to be favorable, but could you please explain the key factors driving this business's performance into the next fiscal year?CFO Furuya: There have been no specific events that caused a change from the November 2025 forecast. Our view that this is an area with room for growth next fiscal year has not changed. Nowlake is continuing to perform well. While the revised forecast reflects a slightly more conservative view on credit costs, we still expect earnings to continue to improve.
It is still uncertain whether this will be a tailwind, but we see it as a core area with steady growth potential.
CEO Omoto: To add, the investment in Wheels has now completed the integration of the three companies carried out last fiscal year, which allows us to focus more on growth strategies this fiscal year. As we are now at the stage where PMI is complete, we have certain expectations for sales growth.
Including Nowlake, there were some concerns in the second quarter that the bankruptcy of Tricolor might have a ripple effect. However, there has been no such impact at all so far, and things are progressing steadily.
Regarding the progress of new investments, could you please explain how we should interpret the pipeline figures shown on page 12 of the IR materials? First, for the 140.0 billion yen that has already been internally approved, does this mean the cash outflow is still to come, and if so, what kind of timeline should we expect? Second, for the 140.0 billion yen that is in preparation for approval/under deliberation, could you tell us how much of that is likely to be added next fiscal year and how you expect the returns on these growth investments to develop?CEO Omoto: Since this is the first time we are sharing the table on page 12, let me explain what the figures mean.
First, "executed" and "divested" items refer to amounts for which the cash outflow or collection of cash has already been completed. "Internally approved" items are those for