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Mitsui swings to FY'16 loss on mineral, metal resources results

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Mitsui swings to FY'16 loss on mineral, metal resources results

Mitsui & Co.Ltd.'s mineral and metal resources segment swung to a loss attributableto shareholders of ¥162.5 billion in fiscal 2016, which ended March 31, from a profitof ¥60.9 billion a year ago, the company said May 10.

The result included impairment losses of ¥38.1 billion realizedon fixed assets of Mitsui Coal HoldingsPty. Ltd. due to tumbling coal prices and a ¥12.0 billion negative impacton deferred tax. The previous year also had a ¥4.5 billion gain on the sale of astake in Silver Bell Mining LLC.

Losses before interest, taxes, depreciation and amortizationfor the segment were ¥93.8 billion, compared to EBITDA of ¥116.0 billion in theprior year.

The segment's gross profit for the year declined by ¥49.2 billionto ¥98.7 billion due to lower iron ore prices weighing on the company's Australianoperations.

The Mitsui group swung to a loss attributable to shareholdersof ¥83.41 billion, or ¥46.54 per share, compared to a profit of ¥306.49 billion,or ¥170.95 per share, a year ago.

Revenue for the year dropped 11.9% year over year to ¥4.760 trillionon the back of losses across all businesses, including the mineral and metal resources,iron and steel products, energy, chemicals and Americas segments.

In fiscal 2017, Mitsui expects profit attributable to shareholdersof ¥200.0 billion, or ¥111.58 per share.

The company also expects to lower its annual dividend by ¥14per share to ¥50 per share in fiscal 2017.

Mitsui said separately that it plans to secure a ¥350 billionsubordinated syndicated loan from its main financial institutions.

The loan will be used to support the key initiatives of its strategyto bolster the company's earnings base. It intends to execute the syndicated loanby the end of June.

The loan will have a 60-year maturity, with prepayment enabledfrom 2023, and will be a hybrid finance positioned between debt and equity. Mitsuiexpects that 50% of the loan amount will be eligible for equity treatment by ratingagencies.

Sumitomo Mitsui Banking Corp. will act as the arranger.

As of May 9, US$1 was equivalentto ¥108.36.