February 7, 2019 / 10:30 AM / 14 days ago

UPDATE 1-Marubeni books record 9-month profit though one-off losses loom

* April-Dec net profit grows 33 pct y/y to record 219.6 bln yen

* Keeps annual outlook unchanged due to possible one-off losses

* U.S.-China trade war dents margins of its U.S. grain business (Adds quotes and details)

By Yuka Obayashi

TOKYO, Feb 7 (Reuters) - Japanese trading house Marubeni on Thursday reported a record net profit for the April to December period, but may book one-off losses on its stake in a U.S. grain business and overseas power projects in the January to March quarter.

Marubeni’s net profit for the nine months to Dec. 31 grew 33 percent to a record 219.6 billion yen ($2 billion), supported by stronger income from pulp and paper, transportation and energy segments.

But Marubeni stuck to its full-year profit forecast of 230 billion yen ($2.09 billion) for the year ending on March 31.

The potential impairment loss on its U.S. grain business reflects slumping grain prices and trading volumes in the wake of the prolonged trade dispute between the United States and China, Marubeni Chief Financial Officer Nobuhiro Yabe told a news conference.

“As trading volume declined, competitions became more fierce and weighed on the margins of our grain businesses,” he said, pointing to soybean and other grains.

“But if the United States and China could make a deal, there is a possibility that things get better dramatically,” he said.

As for its power generation business, Yabe said Marubeni plans to reassess the value of some overseas projects that are getting affected by falling electricity prices.

“Most of our power projects have long-term contracts such as power purchase agreements, but some are exposed to electricity market risk,” he said, without elaborating further.

Rival trading companies Mitsubishi Corp and Itochu Corp also reported record profits for the nine month period.

Japanese trading companies have benefited from higher prices for commodities such as oil and coal, while their results also reflect healthy earnings in non-resource segments which they have strengthened since the last commodities down-cycle. ($1 = 109.8700 yen) (Reporting by Yuka Obayashi; editing by Christian Schmollinger)

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