Mitsubishi Corporation revenues down, will sell Petro-Diamond Singapore
Topics: MITSUBISHI CORPORATION
This was mainly due to decreased transaction volumes in the Petro-chemical business.
Gross profit was ¥903.1 billion, a decrease of ¥91.4 billion, or 9% year over year, mainly due to increased production cost and decreased market price in the Australian metallurgical coal business as well as the loss related to crude oil trading derivatives.
Selling, general and administrative expenses remained nearly the same year over year at ¥711.0 billion.
Gains on investments increased ¥18.2 billion, or 209% year over year, to ¥26.9 billion, mainly due to rebound from impairment loss of investment in Chiyoda Corporation in the previous year and fair value evaluation profit due to Chiyoda Corporation becoming a consolidated subsidiary.
Impairment losses on property, plant and equipment and others remained nearly the same year over year at ¥7.1 billion.
Other income (expense)-net remained nearly the same year over year at an expense amount of ¥14.2 billion.
This is to inform you that Mitsubishi Corporation has decided to plan to liquidate one of its subsidiaries based in Singapore, Petro-Diamond Singapore (hereinafter “PDS").
As previously reported on September 20, an employee who was hired locally by PDS engaged in a series of unauthorized crude-oil derivatives transactions over an extended period. PDS has confirmed that after closing the positions concerned, it will realize a loss of approximately 34.2 billion yen before taxes, which could put the subsidiary’s final debt as high as 30.8 billion yen.
MC shall liquidate PDS once the subsidiary has completed its contracted trade of crude oil and petroleum products and its credits and debts have been settled. The detailed schedule of the liquidation shall be determined based on required processes and considerations.
In consultation with all concerned parties, PDS shall fulfill its remaining contractual obligations for the trade of crude oil, naphtha and petroleum products. Meanwhile, MC shall continue its overseas crude oil / naphtha / petroleum products operations once it has reconfirmed that its risk management systems are both sound and thoroughly enforced, taking all possible measures to prevent similar incidents from occurring in the future.
An estimation of how this loss will impact MC is included in its revised consolidated forecast for the year ending March 2020. ■