February 5, 2018 / 8:42 AM / in 16 days

UPDATE 1-Trader Mitsubishi Corp raises profit outlook on higher coal prices

* Mitsubishi’s 9-month profit grows 12 pct to record

* FY17/18 div f‘cast raised to Y100/share from Y95/share

* May increase stake in Quellaveco copper project in Peru (Adds CFO comments, details on revised profit forecast)

By Yuka Obayashi

TOKYO, Feb 5 (Reuters) - Japanese trading house Mitsubishi Corp on Monday lifted its full-year profit forecast to a record high for the second time since November, citing stronger coking coal prices.

The higher-than-expected coal prices also raised Mitsubishi’s recurring profit for the nine months through Dec. 31 by 12 percent to a record 416 billion yen ($3.78 billion), mirroring similar record high earnings from trading house peers Mitsui & Co Ltd and Itochu Corp.

In November, Mitsubishi lifted its profit forecast for the year to March 31 to 500 billion yen from 450 billion yen, which would be its highest annual profit in a decade.

On Monday, it further lifted the forecast to 540 billion yen, beating a mean estimate of 522 billion yen from nine analysts surveyed by Thomson Reuters I/B/E/S. Mitsubishi also increased its annual dividend outlook from 95 yen per share to 100 yen per share.

Mitsubishi’s Chief Financial Officer Kazuyuki Masu told reporters the price rally in coking coal was partially due to stronger-than-expected demand from China for high-quality coal.

Australian premium coking coal futures in Singapore have surged over 50 percent from a November low of $174 to $265 a tonne by early January. They have since come off to around $225 a tonne.

“But the rally has been overdone. We expect the coking coal prices to head slightly lower through the end of March,” Masu added.

Mitsubishi also expects its metals unit, which includes copper and iron ore assets, to generate 240 billion yen for the year, nearly half of the total profit.

“As we enter into an era of electric vehicles, we are considering to invest in copper,” Masu added, citing a possible purchase of an additional stake in copper mines in which it already holds a stake such as the Quellaveco project in Peru.

Mitsubishi owns 18 percent stake in Quellaveco copper project which is 82 percent held by Anglo American. Anglo American has said that it could expand copper capacity in Peru this year.

$1 = 109.9600 yen Reporting by Yuka Obayashi Editing by Joseph Radford and Miral Fahmy

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