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Oil Is At The Center Of The 2020 Elections

Oil Is At The Center Of The 2020 Elections

Oil prices rallied back early…

Commodities Rout Causes Huge Japanese Trading Firm To Post First-Ever Loss

Japanese trading firm Mitsui & Co warned Wednesday that it is set to post its first annual loss since being established in 1947, after a sustained rout in energy and metal prices forced it to book $2.3 billion (260 billion yen) in write-downs on projects from South America to Australia. Related: China’s Oil Majors See Production In Biggest Fields Shrink

The Tokyo-based firm, Japan’s second biggest trading house, expects a net loss of 70 billion yen ($623 million) in the fiscal year ending March. This is due to booking impairment charges on assets which include the Caserones copper project in Chile, the Browse LNG project in Australia and its Brazilian mining unit. The company had previously forecast a net income of 190 billion yen.

Last month, a Chilean court backed the country’s environmental authority on its decision to charge Caserones with the second-highest fine ever imposed in the South American nation, after the regulator found a number of infractions at the mine. The largest penalty so far — $16 million — was imposed in 2013 to Barrick Gold’s (TSX, NYSE:ABX) now shelved Pascua Lama gold and silver mine. Related: The Current Oil Price Rally Is Reaching Its Limits

More than two-thirds of Mitsui’s profit comes from its resource business, such as iron ore, coal, oil and gas trading, which explains the major impact the plunge in commodity prices is having on the Japanese firm.

For every dollar drop in the price of crude, Mitsui’s profit falls by about 2.7 billion yen, the company said in a presentation last November.

Despite its loss forecast, Mitsui maintained its dividend forecast of 64 yen per share for the full year.

By Cecilia Jamasmie via Mining.com

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