MIRA INFORM REPORT

 

 

Report Date :

13.04.2007

 

IDENTIFICATION DETAILS

 

Name :

ITOCHU CORPORATION

 

 

Registered Office :

2-5-1 Kitaaoyama Minatoku Tokyo 107-8807

 

 

Country :

Japan

 

 

Financials (as on) :

31.03.2006

 

 

Date of Incorporation :

Dec 1949

 

 

Legal Form :

Limited Company (Kabushiki Kaisha)

 

 

Line of Business :

General trading house

 

 

RATING & COMMENTS

 

MIRA’s Rating :

A

 

RATING

STATUS

PROPOSED CREDIT LINE

56-70

A

Financial & operational base are regarded healthy. General unfavourable factors will not cause fatal effect. Satisfactory capability for payment of interest and principal sums

Fairly Large

 

Maximum Credit Limit :

Yen 123225.4 millions

 

 

Status :

Good

 

 

Payment Behaviour :

Regular

 

 

Litigation :

Clear

 

 

name

 

ITOCHU CORPORATION

 

 

REGD NAME

 

Itochu Shoji KK

 

 

MAIN OFFICE

 

(Tokyo) 2-5-1 Kitaaoyama Minatoku Tokyo 107-8807 JAPAN

Tel: 03-3497-2121

Fax: 03-3497-4141

(Osaka) 4-1-3 Kyutaromachi Chuoku Osaka 541-8577

Tel: 06-6241-2121

Fax: 06-6241-3220

URL: http://www.itochu.co.jp/

E-Mail address: webmaster@itochu.co.jp

 

 

ACTIVITIES

 

General trading house

 

 

BRANCHES

 

Osaka, Nagoya, Fukuoka, Hiroshima, Sapporo, other (Tot 20)

 

 

OVERSEAS

 

USA, Europe, China, other (Tot 135 over 80 countries)

 

 

CHIEF EXEC

 

EIZO KOBAYASHI, PRES & CEO

 

Yen Amount:     In million Yen, unless otherwise stated

 

 

SUMMARY

 

FINANCES        FAIR                             A/SALES          Yen 10,473,885 M

PAYMENTS      REGULAR                     CAPITAL           Yen 202,241 M

TREND             STEADY                       WORTH            Yen 726,816 M

STARTED         1949                             EMPLOYES      42,967

 

 

COMMENT

 

NATION’S LEADING GENERAL TRADING HOUSE.  FINANCIAL SITUATION         CONSIDERED FAIR AND GOOD FOR ORDINARY BUSINESS ENGAGEMENTS.

 

MAX CREDIT LIMIT: YEN 123,225.4 MILLION, 30 DAYS NORMAL TERMS.

 

                          Forecast (or estimated) figures for 31/03/2007 fiscal term

 

 

HIGHLIGHTS

           

This is major general trading house, currently top textile trader among domestic trading companies, with comprehensive strength in all areas of the textile industry from upstream to down-stream operations, while actively trying to expand into textile retailing.  Also strong in food         industry, machinery plants, chemicals, energy and condominiums.  Further aggressive in satellite communications to lead other trading houses in telecom & China businesses.  Has stake in Perfect             TV satellite broadcaster.  Implemented independently managed “division company system” in Apr 1997.  (See OPERATION).

 

(Recent report):  The firm will start selling used cars in China & India, seeing that higher new-car      sales in these countries will bump up the need to sell pre-owned vehicles.  In India, test sales of pre-owned Honda Motor Co cars will begin this fall.  Monthly sales are expected to reach five to 10 used vehicles at a Honda dealership in the state of Uttar Pradesh.

 

In China, will start selling pre-owned Nissan Motor Co cars this summer in Sichuan Province. 

 

 

FINANCIAL INFORMATION

 

The sales volume for Mar/2006 fiscal term amounted to Yen 10,473,885 million, a 9.4% up from Yen 9,576,039 million in the previous term.  This is driven by strong earnings at its metals & energy businesses and machinery division. .The recurring profit was posted at Yen 216,869 million and the net profit at Yen 145,146 million, respectively, a sharp turnaround from Yen 119,958 million recurring profit and Yen 77,792 million net profit, respectively, a year ago.

           

For the current term ending Mar 2007 the recurring profit is projected at Yen 235,000 million and the net profit at yen 165,000 million, respectively, on a 4.1% rise in turnover to Yen 10,900,000 million. 

 

Apr/Dec/2006 results: Sales Yen 8,583,375 million (up 12.2%), recurring profit Yen 216,465 million (up 44.0%), net profit Yen 150,511 million (up 37.1%).  (% compared with the same period of             previous fiscal year.  This is mainly due to the turning of Nippon Access Inc into a consolidated subsidiary in Food division this fiscal year, and in Machinery due to expansion of automobile transactions, and in Energy, Metals and Chemicals, Forest Products & General Merchandise due to steady market trend. 

           

The financial situation is considered FAIR and good for ORDINARY business engagements.  Max credit limit is estimated at Yen 123,225.4 million, on 30 days normal terms.

 

 

REGISTRATION

           

Date Registered:            Dec 1949

Legal Status:                 Limited Company (Kabushiki Kaisha)

Authorized:                    3,000 million shares

Issued:                          1,584,889,504 shares

Sum:                            Yen 202,241 million

Major shareholders (%): Japan Trustee Services Bank T (9.0), Master Trust Bank of Japan, T (6.5), Mitsui

                                    Sumitomo Ins (3.0), Nippon Life Ins (2.5), Tokio Marine & Nichido Fire Ins (2.5), Nippon

                                    Koa Ins (2.5), Mizuho Corporate Bank (1.9), Asahi Life Ins (1.7), State Street Bank &

                                    Trust (1.8), Trust & Custody Ins (1.8); foreign owners (28.0)

No. of shareholders:       86,941

Listed on the S/Exchange (s) of: Tokyo, Osaka, Sapporo, Nagoya, Fukuoka

Managements:               Uichiro Niwa, ch; Eizo Kobayashi, pres & CEO; Sumitaka Fujita, v ch; Akira Yokota, v

                                    pres; Yohei Watanabe, v pres; Toshihito Tanba, s/mgn dir; Shigeki Nishiyama, s/mg dir;

                                    Masahiro Okafuji, s/mgn dir; Yosuke Minamitani, mgn dir

 

Nothing detrimental is known as to the commercial morality of executives.

 

 

Related companies

 

Itochu Techno Science, Itochu Shokuhin, other (Tot 442 as of Mar/06)

           

           

OPERATION

           

Activities: Activities: A general trading house; Sales breakdown by divisions:

 

Textile Company (８%): Raw cotton, Cotton yarns, Wool, yarns, Rayon staple, Spun rayon yarns, Rayon yarns, Synthetic staple, Synthetic filament, Cotton fabrics, Wool fabrics, Silk fabrics, Rayon fabrics, Spun rayon fabrics, Synthetic filament fabrics, Knit fabrics, Knit outer garments, Knit under garments, Woven outer garments, Woven under garments, Other garments, Secondary textile products, Imported sundries, Bedding fabrics, Interior fabrics, Industrial fibres, Inorganic fibres and related products, etc.

Machinery Company (1４%): Civil engineering, Construction, Mining and related materials handling machinery, Agricultural machinery, Metalworking and processing machinery and plant, Forging machinery, Textile machinery, Semiconductor manufacturing equipment, Automobile parts manufacturing plant, Plant related to the iron and steel industry, Cement plant, Food machinery, Grain silos, Hospital equipment, Oil, gas, and chemical plants, Passenger vehicles, Commercial vehicles, Automobile parts and equipment, Special-purpose vehicles, Rolling stock, Ships, Power generating equipment, etc.

Aerospace, Electronics & Multimedia Company (7%): Satellite communications, International telecommunications, Terminals and peripheral equipment for broadcasting and communications systems, Entertainment and content business, Systems and related machinery for mobile telephones, Systems and related equipment for computer and information processing, Semiconductor equipment, Aircraft, In-flight equipment, Space-related equipment, Security equipment etc.

Energy, Metals & Minerals Company (2７%): Iron ore, Direct reduced iron, Coking coal, Coke, Thermal coal, Ferro alloy and its materials, Ferrous scrap, Pig iron, Metal powder, Electrodes, Activated carbon, Steel plates, Hot & cold rolled sheets and coils, Galvanized steel, Steel for machinery, Stainless steel, High tensile steel, Construction materials, Welded steel pipes, Seamless steel pipes, Steel wires, Marine steel structures, Bridges, Prefabricated steel for buildings, Rails, Non-ferrous metals, Precious metals, Rare metals, Aluminium, Crude oil, Natural gas liquid (NGL), Gasoline, Naphtha, Kerosene, Jet fuel, Gas oil, Fuel oil, Bunker oil, Lubricant, Asphalt, Liquefied petroleum gas (LPG), Liquefied natural gas (LNG), Nuclear fuel (uranium concentrates, uranium hexafluoride), Nuclear power related equipment

Chemicals, Forest Products & General Merchandise Company (19%): Logs, Lumber, Wooden building materials, Wood chips, Wood pulp, Recycled paper, Cotton linter, Paper, Paperboard, Paper products, Natural rubber, Tyres, Footwear, Furniture, Glass, Cement crysotile, Landscape materials, Refractory materials and products, Natural gypsum, etc. Chemical feedstock, Olefin, Aromatics, Raw materials for synthetic resins, Tar chemicals, Raw materials for synthetic fibres, Organic chemicals, Methanol, Ethanol, Solvents, Speciality chemicals, Inorganic chemicals, Chemical fertilisers, Vinyl chloride, Polyolefin, Synthetic rubbers, Carbon black, Thermoplastic and thermosetting resins, Resin additives, Glass fibres, etc.

Food Company (21%): Wheat, Barley, Wheat flour, Rice, Starches, Soybeans, Sunflower oil, Olive oil, Palm oil, Coconut oil, Corn, Soybean meal, Rapeseed meal, Fish meal, Alfalfa pellets, Raw sugar, Sweeteners, High-fructose corn syrup, Dairy products, Nuts, Coffee, Cocoa, Fruit juice, Liquor, Soft drinks, Beef, Pork, Chicken, Fruits and vegetables, Processed foods, Frozen foods, Canned foods, Pet foods, Consulting services for food business.

Finance, Realty, Insurance & Logistics Services Company (5%): Finance: Foreign exchange and securities trading, securities and fund investment, asset management (including structuring and sales of financial products), lending, online securities broking, other financial services; Realty: Planning, developing, constructing, contracting, managing, operating, selling related facilities and materials for residential housing, office buildings, resort facilities, golf courses, industrial parks, hotels; Insurance: Insurance and reinsurance agency, broking of insurance and reinsurance, consulting of insurance and reinsurance; Logistics services: Warehousing, trucking, operation of logistics centres, chartering, international intermodal transport, air cargo, travel services, distribution processing, freight forwarding, customs clearance, etc.

 

(Overseas trading ratio: 41.9%: N America 8.4%; Europe 3.6%, Asia 23.8% Others 8.1%)

 

Clients: [Wholesalers, mfrs] Itochu Shokuhin, Yukijirushi Access Inc, Nisseki Itochu, Nishino Trading, Prima Meat Packers, other.

 

No. of accounts: 3,000

 

Domestic areas of activities: Nationwide

 

Suppliers: [Mfrs, wholesalers, carmakers] Mazda Motor, Nippon Steel, Isuzu Motors, Nissin Food Products, JGC Corp, other.

 

Payment record: Regular

 

Location: Business area in Tokyo.  Office premises at the caption address are owned and maintained satisfactorily.

 

           

Bank References

 

Mizuho Corporate Bank (Uchisaiwaicho)

SMBC (H/O)

 

Relations: Satisfactory

 

 

FINANCES

 

(Consolidated in million yen)

 

　

　

Terms Ending:

31/03/2006

31/03/2005

INCOME STATEMENT

 

 

 

  Annual Sales

　

10,473,885

9,576,039

 

  Cost of Sales

9,759,511

8,945,278

 

      GROSS PROFIT

714,374

630,761

 

  Selling & Adm Costs

506,257

466,840

 

      OPERATING PROFIT

208,117

163,921

 

  Non-Operating P/L

8,752

-37,782

 

      RECURRING PROFIT

216,869

119,958

　

      NET PROFIT

145,146

77,792

BALANCE SHEET

 

 

 

 

  Cash

　

477,707

452,934

 

  Receivables

 

1,211,035

1,085,853

 

  Inventory

 

458,876

420,069

 

  Securities, Marketable

48,282

49,149

 

  Other Current Assets

483,723

433,890

 

      TOTAL CURRENT ASSETS

2,679,623

2,441,895

 

  Property & Equipment

813,876

808,282

 

  Intangibles

 

487,787

497,358

 

  Investments, Other Fixed Assets

815,727

724,810

 

      TOTAL ASSETS

4,797,013

4,472,345

 

  Payables

 

921,797

805,150

 

  Short-Term Bank Loans

382,434

421,697

 

　

 

　

　

 

  Other Current Liabs

825,595

833,292

 

      TOTAL CURRENT LIABS

2,129,826

2,060,139

 

  Debentures

 

　

　

 

  Long-Term Bank Loans

1,762,103

1,750,815

 

  Reserve for Retirement Allw

19,081

22,405

 

  Other Debts

　

29,470

11,653

 

      TOTAL LIABILITIES

3,940,480

3,845,012

 

      MINORITY INTERESTS

129,717

116,936

 

Common stock

202,241

202,241

 

Additional paid-in capital

137,035

137,024

 

Retained earnings

315,928

188,270

 

Evaluation p/l on investments/securities

　

　

 

Others

 

72,889

(16,312)

 

Treasury stock, at cost

(1,277)

(826)

 

      TOTAL S/HOLDERS` EQUITY

726,816

510,397

　

      TOTAL EQUITIES

4,797,013

4,472,345

CONSOLIDATED CASH FLOWS

 

 

 

 

Terms ending:

31/03/2006

31/03/2005

 

Cash Flows from Operating Activities

　

185,147

126,624

 

Cash Flows from Investment Activities

-79,871

-127,600

 

Cash Flows from Financing Activities

-85,193

-125,342

　

Cash, Bank Deposits at the Term End

　

477,707

452,934

ANALYTICAL RATIOS            Terms ending:

31/03/2006

31/03/2005

 

 

Net Worth (S/Holders' Equity)

726,816

510,397

 

 

Current Ratio (%)

125.81

118.53

 

 

Net Worth Ratio (%)

15.15

11.41

 

 

Recurring Profit Ratio (%)

2.07

1.25

 

 

Net Profit Ratio (%)

1.39

0.81

 

 

Return On Equity (%)

19.97

15.24

 

 

RATING EXPLANATIONS

 

RATING

STATUS

 

 

PROPOSED CREDIT LINE

>86

Aaa

Possesses an extremely sound financial base with the strongest capability for timely payment of interest and principal sums

 

Unlimited

71-85

Aa

Possesses adequate working capital. No caution needed for credit transaction. It has above average (strong) capability for payment of interest and principal sums

 

Large

56-70

A

Financial & operational base are regarded healthy. General unfavourable factors will not cause fatal effect. Satisfactory capability for payment of interest and principal sums

 

Fairly Large

41-55

Ba

Overall operation is considered normal. Capable to meet normal commitments.

 

Satisfactory

26-40

B

Unfavourable & favourable factors carry similar weight in credit consideration. Capability to overcome financial difficulties seems comparatively below average/normal.

 

Small

11-25

Ca

Adverse factors are apparent. Repayment of interest and principal sums in default or expected to be in default upon maturity

 

Limited with full security

<10

C

Absolute credit risk exists. Caution needed to be exercised

 

 

Credit not recommended

NR

In view of the lack of information, we have no basis upon which to recommend credit dealings

No Rating

 

 

This score serves as a reference to assess SC’s credit risk and to set the amount of credit to be extended. It is calculated from a composite of weighted scores obtained from each of the major sections of this report. The assessed factors and their relative weights (as indicated through %) are as follows:

 

Financial condition (40%)            Ownership background (20%)                 Payment record (10%)

Credit history (10%)                    Market trend (10%)                                Operational size (10%)

 

 

PRIVATE & CONFIDENTIAL : This information is provided to you at your request, you having employed MIPL for such purpose. You will use the information as aid only in determining the propriety of giving credit and generally as an aid to your business and for no other purpose. You will hold the information in strict confidence, and shall not reveal it or make it known to the subject persons, firms or corporations or to any other. MIPL does not warrant the correctness of the information as you hold it free of any liability whatsoever. You will be liable to and indemnify MIPL for any loss, damage or expense, occasioned by your breach or non observance of any one, or more of these conditions