(Recasts with sale of coal asset, earnings and CFO comments)
TOKYO, Feb 4 (Reuters) - Japanese trading house Itochu Corp said on Thursday it has booked an one-off loss of 88.6 billion yen ($843 million) in the April-December period from a sale of its stake in a coal mine in Colombia to its partner Drummond.
The Japanese company flagged the sale last month when it unveiled a plan to exit the thermal coal business, selling its stakes in mines in Columbia and Australia by March 2024, to promote decarbonisation.
The 88.6 billion yen loss was only on a parent-company basis, which excludes its subsidiaries, and was not reflected in the group’s consolidated earnings.
Itochu, which has bought the 20% stake in the mine from U.S. coal miner Drummond in 2011 for 126.5 billion yen, plans to complete the deal by March 2022, a company spokesman said.
The loss did not hit Itochu’s consolidated profit because the investment has become an unconsolidated item since 2015 when the mine’s owners changed their shareholder agreement to lower Itochu’s power in decision-making, he said.
Still, the loss has trimmed Itochu’s consolidated shareholders’ equity, he said, without giving an actual amount.
“We also plan to sell our remaining stake in thermal coal mines in the near future,” Itochu Chief Financial Officer Tsuyoshi Hachimura told a news conference, adding it had no plan to exit from coking coal mines.
Aside from the Colombian mine which accounts for about 80% of Itochu’s thermal coal assets, the Japanese company owns a 15% stake in the Maules Creek mine and 10% stake in the Ravensworth North mine, both in Australia.
Itochu stuck to its annual net profit forecast of 400 billion yen for the year to March 31 after reporting a 17% increase in profit for the April-December period.
Itochu expects limited impact on its Myanmar business from this week’s coup there, but it is watching the situation closely as it may cause geopolitical risk in other areas, Hachimura said. ($1 = 105.1600 yen) (Reporting by Yuka Obayashi Editing by Tom Hogue, Robert Birsel)
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