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Mitsui & Co. profit hits record, to stay involved in Russian gas

© Supplied by ShutterstockWood Russia 2022
An LNG tanker docked at the Sakhalin 2 project in Russia

Japanese trading giant Mitsui & Co. nearly tripled its full-year profit to an all-time high on soaring energy and commodity prices, and said the company will keep its involvement in liquefied natural gas projects in Russia.

Net income for the year ended March surged to 914.7 billion yen ($7 billion), it said in a statement Monday, adding it will spend as much as 100 billion yen to buy back 3% of its shares to reward investors. The strong results, which beat analyst estimates, come even as the company booked a 20.9 billion yen loss linked to LNG projects in Russia in the fourth quarter.

Mitsui President Kenichi Hori said the company will stay involved with the Sakhalin-II LNG project, a very important energy source for Japan. Mitsubishi Corp. and Mitsui & Co. own a combined 22.5% of the Sakhalin project, and a majority of the gas produced there supplies Japan. The company said it will also proceed as scheduled to develop Russia’s Arctic LNG 2 project, while closely monitoring the situation.

“Uncertainty is rising, and the geopolitical risk is unpredictable,” Hori said at a briefing. “We will keep the need for energy security in mind.”

Mitsui and other trading houses are benefiting from surging energy and commodity markets, as supply constraints, geopolitical tensions and a demand rebound push up prices of everything from iron ore to oil and coal. Mitsui is the first of Japan’s top five trading houses known as “sogo shosha” to report earnings and give an outlook for the financial year that started in April.

For the coming year, Mitsui forecast net income of 800 billion yen, in line with analyst estimates. Hori said profits will moderate as market conditions for some commodities normalize. The company said it will buy as many as 50 million outstanding shares between May 6 and Sept. 22.

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