MIRA INFORM REPORT
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Report Date : |
03.12.2008 |
IDENTIFICATION
DETAILS
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Name : |
MARUBENI-ITOCHU STEEL INC |
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Registered Office : |
Nihombashi 1-Chome Bldg, 1-4-1 Nihombashi Chuoku
Tokyo 103-8247 |
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Country : |
Japan |
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Financials (as on) : |
31.03.2008 |
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Date of Incorporation : |
October, 2001 |
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Legal Form : |
Limited Company |
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Line of Business : |
Trading House specializing in Iron
& Steel Materials & Products |
RATING &
COMMENTS
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MIRA’s Rating : |
A |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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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 |
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Maximum Credit Limit : |
Yen 34,956.4 Million |
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Status : |
Good |
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Payment Behaviour : |
Regular |
Name
MARUBENI-ITOCHU
STEEL INC
REGD NAME
Itochu Marubeni Tekko KK
MAIN OFFICE
Nihombashi 1-Chome Bldg, 1-4-1 Nihombashi Chuoku Tokyo 103-8247 JAPAN
Tel: 03-5204-3300 Fax: 03-5204-3810
E-Mail address: Not
specified (thru the URL to each Division)
ACTIVITIES
Trading house specializing in iron & steel materials
& products
BRANCHES
Osaka, Nagoya, Sapporo, Hiroshima, Fukuoka, other (Total 14)
OVERSEAS
China (8), India (4), Australia (4), USA (9), Canada (2),
Europe/CIS, other (29)
SUBSIDIARIES
(Domestic) 48; (Overseas) 58
OFFICER(S)
TSUNEKATSU YONEZAWA, PRES Kenichiro
Ushino, v pres
Yukio Yamada, mgn dir Masahiro
Yamamoto, dir Yasuhiko
Koike, dir Ryuji Kobayashi, dir
Yen Amount: In
million Yen, unless otherwise stated
SUMMARY
FINANCES FAIR A/SALES Yen 2,035,923 M
PAYMENTS REGULAR CAPITAL Yen 30,000 M
TREND STEADY WORTH Yen 172,500 M
STARTED 2001 EMPLOYES 1724
COMMENT
TRADING HOUSE
SPECIALIZING IN STEEL & IRON PRODUCTS, JOINTLY OWNED BY MARUBENI CORP &
ITOCHU CORP.
FINANCIAL SITUATION CONSIDERED
FAIR AND GOOD FOR ORDINARY BUSINESS ENGAGEMENTS.
MAX CREDIT LIMIT
YEN 34,956.4 MILLION, 30 DAYS NORMAL TERMS
Forecast
(or estimated) for the 31/03/2009 fiscal term.
HIGHLIGHTS
The subject company
was created on the basis of spin-offs and integration of two steel products
divisions at Marubeni Corp and Itochu Corp to form a separate entity. This is a trading house inheriting
successful & traditional business rights of each firm in the line of steel
& iron raw materials & products markets. The firm has four core divisions: Iron & Steel Div (1), Iron
& Steel Div (2), Iron & Steel Div (3), and Tubular Products Div (for
handling items see OPERATION). Osaka
branch office handles these products in lumpsum. Top-ranked in the specific business items. Clients include major car makers, heavy
machinery mfrs, electric appliances mfrs, nationwide.
FINANCIAL INFORMATION
The sales volume
for Mar/2008 fiscal term amounted to Yen 2,035,923 million, a 6.5% up from Yen
1,912,359 million in the previous term.
This is attributed to steep rise in China’s crude steel production
volume, up 15.7%, and global steel output rising 7.5%. Japan’s domestic crude steel production
roughly maintained the previous level.
Steep rise in the prices of raw materials for iron & steel, such as
iron ore & coal, continued to accelerate, underscoring upward tone in the
price of steel products. The recurring
profit was posted at Yen 48,918 million and the net profit at Yen 33,854
million, respectively, compared with Yen 54,473 million recurring profit and
Yen 33,588 million net profit, respectively a year ago. Rise in interest rates deteriorated
recurring profits, while the net profit remained almost at similar level,
helped by the extraordinary profits from fixed asset disposal (posting Yen
1,400 million profits).
(Apr/Sept/2008
results): Sales Yen 1,103,300 million (up 7.7%), operating profit Yen 32,800
million (up 22.8%), recurring profit Yen 33,100 million (up 7.3%), net profit
Yen 20,100 million (up 3.7%). (%
compared with the corresponding period a year ago). During the first half of the year, automobile, shipbuilding and
other high steel demand industries in Japan turned in relatively strong performance. China (gearing up to host the Olympic Games
in August) continued to perform well.
Japanese domestic crude production recorded 2.8% increase to 61.5
million tons, a record high for first-half output for the first time in 35
years. Exports increased.
For the current
term ending Mar 2009 the recurring profit is projected at Yen 49,000 million
and net profit at 30,000 million, on a 6% rise in turnover, to Yen 2,160,000
million. The firm says second-half
projections of an intensified impact from the global financial crisis are
generating concerns about a worsening of the real economy, and stronger value
of the Yen is expected to have a stringent influence on performance. Based on this, however, the firm left the
earlier forecast for the full term unchanged from earlier projections.
The financial
situation is considered FAIR and good for ORDINARY business engagements. Max credit limit is estimated at Yen
34,956.4 million, on 30 days normal terms.
REGISTRATION
Date
Registered: Oct 2001
Legal Status:
Limited Company (Kabushiki Kaisha)
Authorized: 2,400 shares
Issued: 600 shares
Sum: Yen 30,000 million
Major
shareholders (%): Marubeni Corp*(50), Itochu Corp**(50)
No. of
shareholders: 2
*.. One of big 5 general trading houses, Tokyo, founded
1949, listed Tokyo, Osaka, Nagoya, Frankfurt, Düsseldorf S/E’s, capital Yen
262,686 million, turnover Yen 10,631,616 million, operating profit Yen 200,153
million, recurring profit Yen 216,197 million, net profit Yen 147,249 million,
total assets Yen 5,207,225 million, net worth Yen 779,764 million, employees
32,208, pres Teruo Asada.
**.. Equally one of big 5 general trading houses, Osaka,
founded 1949, listed Tokyo, Osaka, Nagoya S/E’s, capital Yen 202,241 million,
turnover Yen 12,412,456 million, operating profit Yen 266,524 million,
recurring profit Yen 282,707 million, net profit Yen 218,585 million, total
assets Yen 5,255,420 million, net worth Yen 978,471 million, employees 48,557,
pres Eizo Kobayashi.
Nothing detrimental is known as to the commercial morality
of executives.
OPERATION
Activities: A trading firm jointly owned by
Marubeni Corp & Itochu Corp, specializing in iron & steel products
& related, having the following 4 core divisions:
Iron
& Steel Div (1): handles a full range of steel
products for automakers and auto parts makers, including carbon steel,
specialty steel, stainless steel, electrical steel sheets, magnequench powder,
etc;
Iron
& Steel Div (2): handles steel sheet products for
domestic users in the appliance, furniture, container and office automation
equipment, etc, including foreign business of slabs, billets, blooms &
other semi-finished products, bars, shapes, plates, hot rolled and cold rolled
steel, coated steel sheets, tin mill products, clad steel plates, copper alloy
tubes;
Iron
& Steel Div (3); handles plates & shapes,
specialty steel, wire products & stainless steel. The division newly started Noble Metals Dept to handle noble
items, such as Titanium, Cupro-Nickel tubes,, offering package of noble metals
required for construction of Desalination Plants;
Tubular
Products Div: handles various types of tubular products and equipment
& materials for plant projects. Also
exports pipes for oil fields and major pipeline projects overseas. (Detailed
breakdown of each Division is not available.)
Exports (60%).
Clients: [Automakers, steel mfrs, wholesalers]
Mazda, Fuji Heavy Ind, Nissan Motors, Isuzu Motor, NTN, Matsushita Electric
Ind, Kawasaki Heavy Ind, Hitachi Ltd, Exxon Mobil, other
Exports to Hyundai (Korea), Thai
Controlled Steel Sheet, BNG Steel, other.
No. of accounts: 2,000
Domestic areas of activities: Nationwide
Suppliers: [Steel mfrs, wholesalers] Nippon Steel,
JFE Steel, Nisshin Steel, Kobe Steel, Sanyo Special Steel, Sumitomo Metal Ind,
other.
Payment
record: Regular
Location:
Business area in Tokyo. Office premises
at the caption address are leased and maintained satisfactorily.
Bank References
Mizuho Corporate Bank (H/O)
SMBC (H/O)
Relations: Satisfactory
FINANCES
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FINANCES: (Consolidated
in million yen) |
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Terms Ending: |
31/03/2008 |
31/03/2007 |
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INCOME STATEMENT |
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Annual Sales |
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2,035,923 |
1,912,359 |
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Cost of Sales |
1,920,353 |
1,792,659 |
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GROSS PROFIT |
115,600 |
119,700 |
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Selling & Adm Costs |
64,500 |
62,900 |
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OPERATING PROFIT |
51,100 |
56,800 |
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Non-Operating P/L |
-2,182 |
-2,327 |
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RECURRING PROFIT |
48,918 |
54,473 |
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NET PROFIT |
33,854 |
33,588 |
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BALANCE SHEET |
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Cash |
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19,200 |
28,600 |
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Receivables |
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421,400 |
42,200 |
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Inventory |
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159,700 |
172,100 |
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Securities, Marketable |
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Other Current Assets |
32,300 |
411,400 |
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TOTAL CURRENT ASSETS |
632,600 |
654,300 |
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Property & Equipment |
63,600 |
59,500 |
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Intangibles |
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8,000 |
6,600 |
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Investments, Other Fixed Assets |
85,500 |
105,600 |
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TOTAL ASSETS |
789,700 |
826,000 |
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Payables |
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270,200 |
284,400 |
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Short-Term Bank Loans |
18,200 |
203,400 |
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Other Current Liabs |
200,100 |
49,600 |
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TOTAL CURRENT LIABS |
488,500 |
537,400 |
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Debentures |
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Long-Term Bank Loans |
113,200 |
98,600 |
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Reserve for Retirement Allw |
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Other Debts |
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15,500 |
26,200 |
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TOTAL LIABILITIES |
617,200 |
662,200 |
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MINORITY INTERESTS |
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Common
stock |
30,000 |
30,000 |
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Additional
paid-in capital |
22,400 |
22,400 |
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Retained
earnings |
102,300 |
81,500 |
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Evaluation
p/l on investments/securities |
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Others |
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17,800 |
29,900 |
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Treasury
stock, at cost |
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TOTAL S/HOLDERS` EQUITY |
172,500 |
163,800 |
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TOTAL EQUITIES |
789,700 |
826,000 |
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ANALYTICAL RATIOS Terms
ending: |
31/03/2008 |
31/03/2007 |
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Net
Worth (S/Holders' Equity) |
172,500 |
163,800 |
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Current
Ratio (%) |
129.50 |
121.75 |
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Net
Worth Ratio (%) |
21.84 |
19.83 |
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Recurring
Profit Ratio (%) |
2.40 |
2.85 |
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Net
Profit Ratio (%) |
1.66 |
1.76 |
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Return
On Equity (%) |
19.63 |
20.51 |
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FOREIGN EXCHANGE
RATES
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Currency |
Unit
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Indian Rupees |
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US Dollar |
1 |
Rs.49.90 |
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UK Pound |
1 |
Rs.74.30 |
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Euro |
1 |
Rs.63.42 |
RATING
EXPLANATIONS
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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>86 |
Aaa |
Possesses an extremely sound financial base with the strongest capability
for timely payment of interest and principal sums |
Unlimited |
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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 |
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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 |
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41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
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26-40 |
B |
Unfavourable & favourable factors carry similar weight in credit
consideration. Capability to overcome financial difficulties seems comparatively
below average. |
Small |
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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 |
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<10 |
C |
Absolute credit risk exists. Caution needed to be exercised |
Credit not
recommended |
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NR |
In view of the lack of information, we have no basis upon which to
recommend credit dealings |
No Rating |
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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%)