Struggling trading house Tomen Corp. said Thursday its earnings for the first half to Sept. 30 plunged with sluggish revenues, and its president said the company is reaching out to the Toyota Motor Corp. group for assistance.
“We have asked the Toyota group for help, and we understand they are considering it,” Tomen President Morihiko Tashiro told reporters when the company unveiled the interim financial results.
Tashiro did not go into further detail, but company sources said Tomen has asked Toyota Tsusho Corp., the automaker’s trading house unit, to provide support when it implements its new midterm business plan that begins April 1.
Asked if Tomen will consider a merger with a Toyota group firm, possibly with Toyota Tsusho, Tashiro said, “We have no such plan.”
Toyota Tsusho is the largest shareholder of Tomen.
Under the current business plan through March 31, Tomen aims to boost its capital to 33.1 billion yen, but as of the end of September its capital stood at 4.9 billion yen.
“We have to be prepared for drastic restructuring,” Tashiro said.
In its consolidated earnings report, Tomen said its group net profit for the April-September period fell 45.8 percent from a year earlier to 2.25 billion yen.
Tomen posted revenues of 1.08 trillion yen, down 14.9 percent, as its mainstay fuel segment declined substantially following the decision by OPEC to cut oil production.
Group pretax profit also slipped 40.9 percent to 6.52 billion yen, while group net profit per share stood at 3.53 yen, down from 6.52 yen a year earlier.
As in the previous year, Tomen will skip dividend payments for the first half.
For the full business year through March 31, the company forecasts a group net profit of 11.5 billion yen and a pretax profit of 23.5 billion yen on revenues of 2.2 trillion yen.
In the previous year, Tomen logged a net profit of 4.71 billion yen and a pretax profit of 23.17 billion yen on revenues of 2.38 trillion yen.
Meanwhile, Tomen said in a separate news release it has decided to dissolve three of its overseas subsidiaries as of Thursday. They are Tomen Latin America S.A. in Panama, Tomen Panama S.A. in Panama and TM Trading Co. in Grand Cayman.
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