MIRA INFORM REPORT

 

 

Report Date :

07.11.2012

 

IDENTIFICATION DETAILS

 

Name :

ITOCHU CORPORATION

 

 

Registered Office :

2-5-1 Kitaaoyama Minatoku Tokyo 107-8807

 

 

Country :

Japan

 

 

Financials (as on) :

31.03.2012

 

 

Date of Incorporation :

December 1949

 

 

Com. Reg. No.:

1200-01-077358 (Osaka-Chuoku)

 

 

Legal Form :

Limited Company

 

 

Line of Business :

General Trading House

 

 

No. of Employees :

73,211

 

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

 

Status :

Good

Payment Behaviour :

Regular

Litigation :

--

NOTES:

Any query related to this report can be made on e-mail: infodept@mirainform.com while quoting report number, name and date.

 

ECGC Country Risk Classification List – June 30th, 2012

 

Country Name

Previous Rating

(31.03.2012)

Current Rating

(30.06.2012)

Japan

A1

A1

 

Risk Category

ECGC Classification

Insignificant

 

A1

Low

 

A2

Moderate

 

B1

High

 

B2

Very High

 

C1

Restricted

 

C2

Off-credit

 

D

 

 

japan - ECONOMIC OVERVIEW

 

In the years following World War II, government-industry cooperation, a strong work ethic, mastery of high technology, and a comparatively small defense allocation (1% of GDP) helped Japan develop a technologically advanced economy. Two notable characteristics of the post-war economy were the close interlocking structures of manufacturers, suppliers, and distributors, known as keiretsu, and the guarantee of lifetime employment for a substantial portion of the urban labor force. Both features are now eroding under the dual pressures of global competition and domestic demographic change. Japan's industrial sector is heavily dependent on imported raw materials and fuels. A tiny agricultural sector is highly subsidized and protected, with crop yields among the highest in the world. Usually self-sufficient in rice, Japan imports about 60% of its food on a caloric basis. Japan maintains one of the world's largest fishing fleets and accounts for nearly 15% of the global catch. For three decades, overall real economic growth had been spectacular - a 10% average in the 1960s, a 5% average in the 1970s, and a 4% average in the 1980s. Growth slowed markedly in the 1990s, averaging just 1.7%, largely because of the after effects of inefficient investment and an asset price bubble in the late 1980s that required a protracted period of time for firms to reduce excess debt, capital, and labor. Measured on a purchasing power parity (PPP) basis that adjusts for price differences, Japan in 2011 stood as the fourth-largest economy in the world after second-place China, which surpassed Japan in 2001, and third-place India, which edged out Japan in 2011. A sharp downturn in business investment and global demand for Japan's exports in late 2008 pushed Japan further into recession. Government stimulus spending helped the economy recover in late 2009 and 2010, but the economy contracted again in 2011 as the massive 9.0 magnitude earthquake in March disrupted manufacturing. Electricity supplies remain tight because Japan has temporarily shut down almost all of its nuclear power plants after the Fukushima Daiichi nuclear reactors were crippled by the earthquake and resulting tsunami. Estimates of the direct costs of the damage - rebuilding homes, factories, and infrastructure - range from $235 billion to $310 billion, and GDP declined almost 0.5% in 2011. Prime Minister Yoshihiko NODA has proposed opening the agricultural and services sectors to greater foreign competition and boosting exports through membership in the US-led Trans-Pacific Partnership trade talks and by pursuing free-trade agreements with the EU and others, but debate continues on restructuring the economy and reining in Japan's huge government debt, which exceeds 200% of GDP. Persistent deflation, reliance on exports to drive growth, and an aging and shrinking population are other major long-term challenges for the economy.

 

 

Source : CIA

 

 

 

 

Company 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 9)

 

OVERSEAS

 

USA, Europe, China, other (Tot 114 over 80 countries)

 

 

CHIEF EXEC

 

MASAHIRO OKAFUJI, PRES & CEO

 

Yen Amount:     In million Yen, unless otherwise stated

 

 

SUMMARY    

 

FINANCES                    FAIR                 A/SALES          Yen 11,978,276 M

       PAYMENTS                       REGULAR         CAPITAL           Yen 202,241 M

TREND             UP                    WORTH            Yen 1,696,141 M

STARTED         1          949                   EMPLOYES      73,211

 

COMMENT

 

NATION’S LEADING GENERAL TRADING HOUSE.

 

FINANCIAL SITUATION CONSIDERED FAIR AND GOOD FOR ORDINARYBUSINESS ENGAGEMENTS.

 

                       

                           Unit: In Million Yen

Forecast (or estimated) figures for 31/03/2013 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).  Acquired 3% stake in UNY, general supermarket operator based in Tokai area for collaboration in merchandise development and operation in China.  Constructing export terminals on West Coast jointly with major US grain firm as strategic base for export to China & other Asian countries.  Capital spending is at Yen 350 billion-plus in the March 2012 and March 2013 terms for metals & energy resources.  The company plans to participate in a new large-scale coal mine development project.  It will invest in a Hong Kong finance firm under the aegis of CITIC, a Chinese financial conglomerate.  The firm is considering feasibility research on a ten million ton LNG plant in Russia, jointly with Gazprom & others.  It will start mass production of an annual 1,000 tons vegetable oil-derived lithium-ion battery anode materials jointly with Kureha Corp and Kuraray.

 

 

FINANCIAL INFORMATION

 

The sales volume for Mar/2012 fiscal term amounted to Yen 11,978,276 million, a 5.1% up from Yen 11,353,584 million in the previous term.  It was attributable to higher revenues in several division companies.  The Energy, Metals & Miner Company achieved an increase due to the acquisition of energy-related companies, a rise in prices for iron ore, oil & gas and an increase in iron sales volume counteracted a decrease due to lower coal production and sales volume.  In the Chemicals, Forest Products & General Merchandise Company, revenue increased mainly due to the acquisition of Kwik-Fit Group.  In addition, the Food company rose due to higher market prices of food materials, such as feed grains and others, and an increase in transaction volume in food-distribution-related companies.  By Divisions, Textiles up 2.17% to Yen 601,056 million, Machinery down 1.78% to Yen 1,460,061 million, Metals & Energy up 5.74% to Yen 4,109,412 million, Materials & Chemicals up 11.3% to Yen 2,321,977 million, Food up 5.55% to Yen3,272,045 million.  The recurring profit was posted at Yen 341,174 million and the net profit at Yen 300,505 million, respectively, compared with Yen 182,332 million recurring profit and Yen 161,114 million net profit, respectively, a year ago.

 

For the current term ending Mar 2013 the recurring profit is projected at Yen 300,000 million and the net profit at Yen 280,000 million, respectively, on a 9,4% rise in turnover, to Yen 13,100,000 million.  Softening sales of metals are a cause of concern.  Textiles and foods will grow mainly in China, and the tire business in Europe will also contribute.  Japan’s economy is likely to remain on a recovery track as internal demand increases and exports will pick on the back of accelerating global economic growth in the second half of the fiscal year

 

The financial situation is considered FAIR and good for ORDINARY business engagements. 

 

 

REGISTRATION

 

Date Registered:           Dec 1949

Regd No.:         1200-01-077358 (Osaka-Chuoku)

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 (6.5), Master Trust Bank of Japan T (4.7), State Street Bank & Trust (3.2), Mitsui Sumitomo Ins (2.5), Nippon Life Ins (2.1), SSBT OD05 Omnibus Acct Treaty (2.1), Nippon Koa Ins (2.0), Tokio Marine & Nichido Fire Ins (1.7), Asahi Life Ins (1.7), Japan Trustee Services T9 (1.6); foreign owners (37.7)

 

No. of shareholders: 107,113

 

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

 

Managements: Eizo Kobayashi, ch; Masahiro Okafuji, pres; Yoichi Kobayashi, v pres; Yoshihisa Aoki, s/mgn dir; Tadayuki Seki, s/mgn dir; Koji Takayanagi, s/mgn dir; Tatsuo Fujino, mgn dir; Takeshi Kumedawa, mgn dir; Yoshiharu Matsumoto, mgn dir; Shintaro Ishimaru, mgn dir; Toru Matsushima, mgn dir

 

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

 

Related companies: Itochu Techno Solutions, Itochu Shokuhin, Itochu Enex, other

OPERATION

 

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

Textile Company (5%): 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 (12%): 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 (2%): 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 (34%): 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, Specialty chemicals, Inorganic chemicals, Chemical fertilizers, Vinyl chloride, Polyolefin, Synthetic rubbers, Carbon black, Thermoplastic and thermosetting resins, Resin additives, Glass fibres, etc.

Food Company (27%): 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 (1%): 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: (42%)

Clients: [Wholesalers, mfrs] Itochu Shokuhin, Yukijirushi Access Inc, Nisseki Itochu, Nishino Trading, Prima Meat Packers, Sumitomo Access, Nippon Access Inc, Japan Gas Energy, Sumitomo Chemical Co, 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, Dole, Nissin Foods, 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

 (In Million Yen)

 

FINANCES: (Consolidated in million yen)

 

　

　

Terms Ending:

31/03/2012

31/03/2011

INCOME STATEMENT

 

 

 

  Annual Sales

　

11,978,276

11,393,584

 

  Cost of Sales

8,947,829

10,417,206

 

      GROSS PROFIT

3,030,447

976,378

 

  Selling & Adm Costs

2,757,822

720,075

 

      OPERATING PROFIT

272,620

256,303

 

  Non-Operating P/L

68,554

-73,971

 

      RECURRING PROFIT

341,174

182,332

　

      NET PROFIT

300,505

161,114

BALANCE SHEET

 

 

 

 

  Cash

　

513,489

633,756

 

  Receivables

 

1,653,412

1,426,677

 

  Inventory

 

574,345

504,342

 

  Securities, Marketable

2,770

3,560

 

  Other Current Assets

636,070

507,321

 

      TOTAL CURRENT ASSETS

3,380,086

3,075,656

 

  Property & Equipment

707,933

643,974

 

  Intangibles

 

　

　

 

  Investments, Other Fixed Assets

2,419,254

1,957,079

 

      TOTAL ASSETS

6,507,273

5,676,709

 

  Payables

 

1,434,241

1,236,561

 

  Short-Term Bank Loans

415,268

241,915

 

　

 

　

　

 

  Other Current Liabs

601,565

565,066

 

      TOTAL CURRENT LIABS

2,451,074

2,043,542

 

  Debentures

 

　

　

 

  Long-Term Bank Loans

2,259,717

2,160,772

 

  Reserve for Retirement Allw

64,304

52,564

 

  Other Debts

　

36,037

20,877

 

      TOTAL LIABILITIES

4,811,132

4,277,755

 

      MINORITY INTERESTS

 

 

 

Common stock

202,241

202,241

 

Additional paid-in capital

112,370

112,370

 

Retained earnings

1,296,265

1,036,095

 

Evaluation p/l on investments/securities

(244,394)

(193,683)

 

Others

 

332,344

244,605

 

Treasury stock, at cost

(2,685)

(2,674)

 

      TOTAL S/HOLDERS` EQUITY

1,696,141

1,398,954

　

      TOTAL EQUITIES

6,507,273

5,676,709

CONSOLIDATED CASH FLOWS

 

 

 

 

Terms ending:

31/03/2012

31/03/2011

 

Cash Flows from Operating Activities

　

212,830

335,361

 

Cash Flows from Investment Activities

-416,315

-230,866

 

Cash Flows from Financing Activities

84,704

53,202

　

Cash, Bank Deposits at the Term End

　

513,489

633,756

ANALYTICAL RATIOS            Terms ending:

31/03/2012

31/03/2011

 

 

Net Worth (S/Holders' Equity)

1,696,141

1,398,954

 

 

Current Ratio (%)

137.90

150.51

 

 

Net Worth Ratio (%)

26.07

24.64

 

 

Recurring Profit Ratio (%)

2.85

1.60

 

 

Net Profit Ratio (%)

2.51

1.41

 

 

Return On Equity (%)

17.72

11.52

 

 

FOREIGN EXCHANGE RATES

 

Currency
Unit

Indian Rupees

US Dollar

1

Rs.54.60

UK Pound

1

Rs.87.31

Euro

1

Rs.69.86

 

INFORMATION DETAILS

 

Report Prepared by :

MNL

 

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

Capability to overcome financial difficulties seems comparatively below average.

 

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

----

NB

New Business

----

 

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%)

 

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