Fri, Feb 07, 2003 - Page 11 News List

Third-quarter profit more than doubles for Mitsubishi Corp


Mitsubishi Corp, Japan's second-largest company, said third-quarter profit more than doubled, helped by higher profits from food and retail expansion.

The Tokyo-based trading company reported group net income of Japanese yen 26.2 billion (US$218 million) for the three months ended Dec. 31, compared with Japanese yen 10.4 billion a year earlier. Sales fell to Japanese yen 3.36 trillion from Japanese yen 3.37 trillion.

Mitsubishi is expanding into new businesses, including convenience stores, as its traditional trading units lose clients that are forging direct links with suppliers.

"It was a good result. Foods was the business that set them apart," said Morgan Stanley Japan Ltd analyst Tomokazu Soejima, who has an "overweight/attractive" recommendation on Mitsubishi.

Its nearest rival, Mitsui & Co, "remains heavily reliant on oil, gas and metals trading and it did not do as well," he said.

Mitsui, Japan's No. 2 trading company, said third-quarter net income fell by a fifth to Japanese yen 12 billion because of a loss in its chemical business and reduced earnings from gas and oil sales.

Mitsubishi, the country's second-largest company in sales behind Toyota Motor Corp, has diversified into retailing and combined its store operations into its distribution and trucking businesses to help lower costs.

The company is the biggest shareholder in Lawson Inc, Japan's No. 2 convenience store chain with about 7,500 outlets.

Mitsubishi last year also agreed to buy a 10 percent stake in rival retailer am/pm Japan Co.

Net income from these retail operations and from sales of foods rose by 39 percent to Japanese yen 11.5 billion in the three-month period compared with the previous year, the company said.

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