UPDATE 1-Mitsubishi to see 26 pct drop in 08/09 profit: Nikkei

April 29 (Reuters) - Mitsubishi Corp (8058.T: Quote, Profile, Research) is likely to see a 26 percent drop in group net profit to 350 billion yen ($3.65 billion) for the year ended March 31, hurt by sluggish demand for resources and ballooning losses on shareholdings, the Nikkei business daily said without citing sources.

The general trading house's key resource and energy business was hurt by tepid demand for coking coal as steelmakers scaled back output, the daily said.

The group had previously forecast net income of 420 billion yen for the period.

The lower profit is likely to prompt Mitsubishi to cut its fiscal year-end dividend to below the planned 16 yen per share, the report said.

The group's profit was weighed down by more than 50 billion yen in write-offs on shareholdings due to falling stock prices and worsening earnings at firms in which the group holds stakes, the paper said.

It was also likely hit by a 20 billion to 30 billion yen valuation loss on crude oil-related interests in the Gulf of Mexico in the wake of tumbling fuel prices, the paper added.

For the current financial year, Mitsubishi is expected to log a 43 percent drop in net profit to roughly 200 billion yen, hurt by falling coking coal prices, Nikkei said.

This would represent a drop of more than half from a peak in 2007/08, the paper added.

For the alerts, please double-click [ID:nWNAB9363] ($1=95.98 Yen) (Reporting by Santosh Nadgir in Bangalore; Editing by Himani Sarkar)