MITSUI & CO., LTD. (8031) — Company information

Business

Mitsui & Co. is a general trading company established in 1947, comprising seven segments: Metal Resources, Energy, Machinery & Infrastructure, Chemicals, Steel Products, Lifestyle Industries, and Next-Generation & Functional Promotion. Through 446 consolidated entities (278 consolidated subsidiaries and 168 equity-method affiliates), the company operates diversely across trading, manufacturing, transportation, and financing of goods, as well as resource development, infrastructure construction, and digital utilization. Its main customers span industries worldwide, including the resources and energy industries, manufacturing, infrastructure operators, and consumer goods and healthcare companies. In FY2026 (ending March 2026), revenue was ¥13,995,222 million, and profit for the year attributable to owners of the parent was ¥833,971 million.

Business Model

Mitsui & Co.'s earnings are structured across four layers: (1) production and sales income from resource interests such as iron ore and LNG, (2) investment income from equity-method affiliates (Machinery & Infrastructure, Lifestyle Industries, etc.) (¥447.4 billion in FY2026 (ending March 2026)), (3) gross profit from commodity trading (¥1,328.2 billion in the same period), and (4) dividends received (¥178.7 billion in the same period). The company uses underlying operating cash flow as the funding source for reinvestment and shareholder returns, and runs a cycle in which funds obtained through asset recycling are allocated to the next round of growth investments.

Company Strengths

The company holds the Rhodes Ridge iron ore project in Australia (participated October 2025, property and equipment acquisition of ¥723.8 billion), the Vale Equity Stake (Iron Ore) (dividends received of ¥43.5 billion), and long-term LNG interests including ADNOC LNG, Sakhalin II, and Oman LNG. Equity-based iron ore production volume of 63.8 million tons and oil & gas equity production of 211 thousand barrels per day form a stable earnings base.

Throughout the three years of the Medium-Term Management Plan 2026, basic operating cash flow has been maintained at the ¥1 trillion scale for 5 consecutive periods. Results for FY2026 (ending March 2026) were ¥978.9 billion. Shareholders' equity (equity attributable to owners of the parent) stood at ¥8,767.7 billion, and net DER was 0.47x, maintaining financial soundness while sustaining high credit ratings of R&I "AA (Stable)", Moody's "A3 (Stable)", and S&P "A (Stable)".

The company has built a structure of 446 companies in total, comprising 278 consolidated subsidiaries and 168 equity-method affiliates. Equity in earnings of the Machinery & Infrastructure segment was ¥239.8 billion (up ¥14.2 billion year on year), with quality equity-method affiliates such as IHH Healthcare (Asia's largest private hospital group) and Penske Automotive Group continuing to make stable profit contributions. Earnings growth effects from small-scale aggregation have also been confirmed.

ENVALITH's Perspective

Cash flow from investing activities for FY2026 (ending March 2026) was an outflow of ¥1,033,522 million (a sharp increase from ¥161,988 million in the previous fiscal year), of which acquisition of property, plant and equipment for the Rhodes Ridge Iron Ore Business accounted for ¥723,800 million. Free cash flow turned negative to the tune of ¥80.6 billion, but this can be viewed favorably from the perspective of securing a long-term iron ore supply base. On the other hand, the decline in iron ore prices (average spot price for Fe61% in FY2026 (ending March 2026) of USD100/ton) pushed down net profit in the Metal Resources segment by ¥31.8 billion year on year, and the trajectory of market price levels underlying the investment payback assumptions remains a point of continued focus.

In the Next-Generation & Functional Promotion segment, an equity-method loss of ¥60,438 million arose from the bankruptcy of First Brands Group, a factoring client of JA Mitsui Leasing, along with losses totaling ¥28,050 million related to Mainstream Renewable Power, resulting in net profit of only ¥59.0 billion, down ¥28.3 billion year on year. The forecast for FY2027 (ending March 2026) calls for ¥70.0 billion (up ¥11.0 billion year on year), mainly driven by a rebound from the one-off loss at JA Mitsui Leasing, but the possibility of additional losses cannot be ruled out, putting the effectiveness of credit management and investee monitoring systems to the test.

The forecast for net profit attributable to owners of the parent for FY2027 (ending March 2026) is ¥920,000 million (up 10.3% year on year). The main drivers of the increase are: (1) asset recycling in the Energy segment and expansion of the U.S. gas business (+¥42.2 billion), (2) rebound from one-off losses in Next-Generation & Functional Promotion (+¥11.0 billion), and (3) recovery in equity-method income (¥520.0 billion, up ¥72.6 billion year on year). The underlying assumptions are a USD/JPY rate of ¥150 and JCC crude oil price of USD84/barrel, which assume a stronger yen and higher crude oil price than current levels, meaning risks exist in both directions depending on the external environment. The risk of energy supply disruption due to escalating tensions in the Middle East should be noted as a short-term source of uncertainty.

Performance Trend

Revenue decreased 4.6% from ¥14,662,620 million (FY2025, ended March 2025) to ¥13,995,222 million (FY2026, ending March 2026). Profit attributable to owners of the parent decreased 7.4% from ¥900,342 million to ¥833,971 million, marking a third consecutive year of profit decline from the FY2023 (ended March 2023) peak (¥1,130,630 million). The main factors behind the profit decline were: ① the decline in iron ore and coking coal prices in the Metal Resources segment (segment profit for the period down ¥31.8 billion year on year), ② losses at JA Mitsui Leasing and an impairment on Mainstream in the Next-Generation & Functional Promotion segment (down ¥28.3 billion), and ③ a substantial contraction in gains/losses on securities (from ¥116,348 million to ¥35,308 million). On the other hand, gross profit in the Energy segment increased ¥12.5 billion year on year due to higher U.S. gas prices, and Lifestyle Industries also performed solidly, up ¥26.0 billion. Comprehensive income for the period rose 158.3% year on year to ¥1,756,526 million, as the foreign currency translation adjustment (+¥555.6 billion) driven by yen depreciation and Australian dollar appreciation, together with FVTOCI valuation gains (+¥546.6 billion), significantly boosted net assets.

Growth Strategy

Under the Medium-term Management Plan 2029, expanding the earnings base in the Energy, Lifestyle Industries, and Innovation domains

In FY2026 (ending March 2026), the company invested ¥723,800 million in property, plant and equipment acquisitions, moving full-scale development of the Rhodes Ridge iron ore business in Australia into high gear. This secures a long-term iron ore supply base and strengthens the sustained earning power of the Metal Resources segment. The strategy incorporates rising crude steel production in India and Southeast Asia as an external tailwind.

Through continued investment in large-scale LNG projects such as the capital increase in Mitsui E&P Mozambique (¥44.5 billion), the Blue Point low-carbon ammonia business (¥25.2 billion), and Ruwais LNG, the company is building an earnings base that addresses both energy security needs and decarbonization. Net profit forecast for the Energy segment in FY2027 (ending March 2027) is ¥200.0 billion (up ¥42.2 billion year on year).

Through IHH Healthcare, coffee trading, the consolidation of Begi Holdings as a subsidiary, and the consolidation of Mitsui & Co. Supply Chain Solutions, among others, the company is accelerating the accumulation of earnings in the Food, Healthcare, and Fashion domains. From April 2026, the segment will be renamed the Wellness Ecosystem segment, with net profit for FY2027 (ending March 2027) forecast at ¥55.0 billion (up ¥3.0 billion year on year).

The company plans an annual dividend of ¥140 per share for FY2027 (ending March 2027) (up ¥25 year on year) and will continue progressive dividends throughout the Medium-term Management Plan 2029 period (FY2027 (ending March 2027) through FY2029 (ending March 2029)). It has announced a policy of implementing dividends and share buybacks targeting approximately 50% of cumulative base operating cash flow over the three-year period. In FY2026 (ending March 2026), the company completed a ¥200.0 billion share buyback and full cancellation of the repurchased shares.

MITSUI & CO., LTD.

Business

Business Model

Company Strengths

ENVALITH's Perspective

The large Rhodes Ridge investment is squeezing near-term FCF, though views are split on its assessment as a step toward long-term growth

One-off losses such as the JA Mitsui Leasing loss and Mainstream impairment are distorting the underlying earnings power of the Next-Generation & Functional Promotion segment

The forecast for net profit attributable to owners of the parent for FY2027 (ending March 2026) of ¥920,000 million represents a year-on-year increase of 10.3%, with recovery in Energy and equity-method earnings as key drivers

Performance Trend

Growth Strategy

Disclaimer

MITSUI & CO., LTD.

Business

Business Model

Company Strengths

World-class iron ore and LNG interests portfolio

Basic operating cash flow generation capacity of ¥1 trillion scale for 5 consecutive periods

Multi-layered global investment network of 446 companies centered on equity-method earnings

ENVALITH's Perspective

The large Rhodes Ridge investment is squeezing near-term FCF, though views are split on its assessment as a step toward long-term growth

One-off losses such as the JA Mitsui Leasing loss and Mainstream impairment are distorting the underlying earnings power of the Next-Generation & Functional Promotion segment

The forecast for net profit attributable to owners of the parent for FY2027 (ending March 2026) of ¥920,000 million represents a year-on-year increase of 10.3%, with recovery in Energy and equity-method earnings as key drivers

Performance Trend

Growth Strategy

Establishing a long-term resource base through a major investment in the Rhodes Ridge Iron Ore Business

Responding to the energy transition: expanding LNG, US gas, and Low-Carbon Ammonia & Next-Generation Fuels Business

Expanding the earnings base of the Lifestyle Industries and Wellness Ecosystem

Continuation of progressive dividends and shareholder returns at approximately 50% of cumulative base operating cash flow (Medium-term Management Plan 2029)

Disclaimer