Mitsubishi, Sumitomo raise profit forecasts on strong coal prices

By Yuka Obayashi

TOKYO (Reuters) - Japanese trading houses Mitsubishi Corp and Sumitomo Corp on Monday lifted their net profit estimates for the current financial year by as much as 22 percent, spurred by higher prices of commodities such as coking coal.

The moves followed a profit forecast increase by trading rival Mitsui & Co last week. Three out of Japan's top five trading firms -- Mitsubishi, Sumitomo and Itochu Corp -- are now predicting record annual profits.

Top-ranked Mitsubishi raised its profit forecast for the year to March 31 by 11 percent to 500 billion yen ($4.38 billion), which will surpass a record 471.3 billion yen reached in the year to March 2008, as higher coal prices boost earnings of its metals business.

The revised estimate means a 14 percent increase from a year earlier and beat a mean estimate of 488.8 billion yen from nine analysts surveyed by Thomson Reuters I/B/E/S.

"We are making solid profits from the businesses that are not linked to markets while we capitalise on gains in commodity markets," Mitsubishi Chief Financial Officer Kazuyuki Masu told a news conference.

Profits from non-resource operations such as machinery and real estate have grown over the past decade, he said.

Sumitomo increased its annual profit projection by 22 percent to 280 billion yen, up 64 percent from the previous year and higher than the record 250.7 billion yen posted in the year to March 2012.

The latest guideline came above a mean estimate of 250.6 billion yen from six analysts surveyed by Thomson Reuters I/B/E/S.

"Our resource businesses have suffered from slumping prices (of metals and energy) over the past few years, but they have become tougher as a result of sale or swap in some of our assets," Sumitomo CFO Koichi Takahata told a separate news conference.

Takahata said the company's non-resource divisions such as overseas power generation and real estate have also grown steadily.

Reflecting upbeat earnings, Mitsubishi boosted its annual dividend forecast to a record 95 yen per share while Sumitomo raised it to a record 56 yen per share, bolstering shares in the companies by 3.5 percent and 4.6 percent respectively. They outperformed the Nikkei 225 index which was nearly flat.

Last week, Itochu Corp kept its estimate for a record net profit of 400 billion yen, while Marubeni Corp maintained its profit prediction at 170 billion yen.

($1 = 114.1300 yen)

(Reporting by Yuka Obayashi; Editing by Manolo Serapio Jr.)