New York - Marubeni Corporation expects to write down $1 billion on the value of energy and commodity assets after the plunge in crude oil prices and a failure to meet targets at its Gavilon Holdings LLC grain unit.
The Tokyo-based trading company halved its forecast for net income this year to 110 billion yen ($935 million) after recording about 95 billion yen in writedowns on oil and gas assets, including in the North Sea, and about 50 billion yen on US grain merchant Gavilon, bought for $2.7 billion in 2013 as Marubeni’s largest-ever acquisition.
Marubeni also recorded writedowns at its Chilean copper and Australian coal businesses, it said in a statement. Including a favourable tax impact of about 40 billion yen, its total impairment would run to about 120 billion yen.
In October, domestic peer Sumitomo Corporation wrote down 167 billion yen in the six months to September 30 on losses in the value of investments in shale oil and coal, leaving the company with its first half-year loss since 1998.
Marubeni’s stock dropped after the trading company said it would hold a news conference in Tokyo on Monday, closing down 4.7 percent at 671.2 yen.
Bloomberg