Japan's Mitsui trims FY profit outlook, to keep stake in Vale
Mitsui & Co on Friday cut full-year profit forecast by 2 percent due to the absence of a dividend from Vale, but the Japanese trading house does not plan to change its holding in the Brazilian miner, a company executive said.
With 110 people confirmed dead and another 238 missing, according to firefighters' count on Thursday evening, the collapse of tailings dam, which belongs to top iron ore miner Vale in the town of Brumadinho may be Brazil's deadliest-ever mine disaster.
"We will ask Vale as a board member to take appropriate measures," CFO Takakazu Uchida told a news conference on Friday.
Mitsui currently holds a 5.59 percent stake in Vale.
"We will ask Vale as a board member to take appropriate measures," Chief Financial Officer Takakazu Uchida told a news conference on Friday.
However, the trading house has no plans to change its holding in Vale, he said, adding, "Vale is an important strategic partner".
Mitsui cuts its net profit estimate to 440 billion yen ($4.04 billion) for the year ending March 31, 2019, from 450 billion yen as it will miss a dividend of 10 billion yen from Vale, Uchida said.
The revised forecast was below 457.9 billion yen median of 11 analysts' estimate, compiled by Refinitiv, but the company expects to beat a record profit of 434.5 billion yen hit in the year ended March 2012.
Uchida declined to comment on the outlook for iron ore prices, saying it is too early to determine the impact from the Vale dam disaster.
However, iron ore prices hit their highest level in 22 months after a seven-day rally on Friday, buoyed by supply disruption issues. The market is forecast to move into a deficit this year in the wake of a move by Vale to cut output following a catastrophic dam failure in Brazil last week.
Asked about a U.S. Anadarko-led offshore liquefied natural gas project in Mozambique, Uchida said Mitsui still expects a final investment decision (FID) in first half of 2019.
He also confirmed that Mitsui was in talks with Russia's Novatek over Arctic LNG 2 project, but declined to comment on any further details.
($1 = 108.9000 yen)
(By Yuka Obayashi; Editing by Sherry Jacob-Phillips)
Click here for complete coverage of the dam burst at Vale's Córrego do Feijão mine