May 8, 2018 / 7:58 AM / a year ago

UPDATE 2-Japan's bullish trading firms ride higher metals prices

* Combined profit of top 5 traders highest in 6 years

* Mitsubishi predicts record profit in 2018/19

* Itochu, Mitsui, Sumitomo, Marubeni predict profit growth (Recasts with combined profit of top five trading houses)

By Yuka Obayashi

TOKYO, May 8 (Reuters) - Japanese trading houses, led by Mitsubishi Corp, are riding high on stronger commodities prices, forecasting another profit rise after posting a jump for the year just ended.

Combined net profit of the five major trading houses, including Mitsui & Co, Itochu Corp, Sumitomo Corp and Marubeni Corp, was nearly 1.9 trillion yen ($17.4 billion) for the year ended March 31.

This was the most since the 2011/12 financial year for Japanese trading houses which fulfil a quasi-national role by importing everything from oil to corn to sustain the country’s resource-poor economy.

The firms have benefited from a rally in everything from coal and base metals to oil and natural gas, while their results also reflect stronger earnings in non-resource segments which they have strengthened since the last commodities down-cycle.

This forced Mitsubishi, Japan’s largest trading house by assets, and Mitsui to book their first-ever losses in 2016.

Net profit for Mitsubishi for the last financial year was 560 billion yen ($5 billion), beating its own estimate of 540 billion yen and a mean estimate of 547 billion yen among nine analysts surveyed by Thomson Reuters I/B/E/S.

The result surpassed its previous highest profit of 471 billion yen, reached in the year to March, 2008.

“We have fully capitalised on a rally in commodities,” Mitsubishi’s Chief Financial Officer Kazuyuki Masu said, highlighting higher coking coal, iron ore and copper prices.

Australian premium coking coal futures in Singapore had risen nearly 40 percent to around $218 a tonne by the end of March from about $157 a year earlier. They have since eased to around $187 a tonne.

Strong auto sales in Asia, where the company operates auto dealers, and solid performance in the firm’s liquefied natural gas (LNG) business also supported profits, Masu added.

Mitsubishi’s results follow record earnings last week from Itochu. Mitsui, Sumitomo and Marubeni also booked growth in annual profits on Tuesday, with Sumitomo and Marubeni renewing their record profits.

For this year, Mitsubishi forecast its net profit would grow 7 percent to a record of 600 billion yen, above a mean estimate of 568 billion yen from nine analysts.

Its rivals also predicted profit growth for this year.

To reflect healthy earnings, Mitsubishi increased its annual dividend for the last year to 110 yen per share from 80 yen a year earlier, while forecasting 115 yen for this year. The other trading houses also boosted their dividends for the period. (Reporting by Yuka Obayashi and Aaron Sheldrick Editing by Joseph Radford and Alexander Smith)

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