Base Profit, Built ¥52 Billion a YearNarrow moat

Mitsui measures its progress with a figure it calls base profit enhancement: the increase in earnings from new projects, cost reductions and growth in existing businesses, excluding commodity prices and one-off gains. It reported increases of ¥65 billion, ¥55 billion and ¥52 billion in the three years of its last plan, meeting its target of ¥170 billion¹.

That is the part of the business an investor can most influence. Commodity prices, the exchange rate and asset sales swing profit by hundreds of billions of yen; base profit moves by tens of billions a year, but in one direction.

The annual additions have been getting smaller, from ¥65 billion to ¥52 billion. The new plan's larger investments, such as Rhodes Ridge, add base profit only when they start producing, around 2030.

Mitsui's guidance for the current year shows how it expects the steady part to grow: gross profit of ¥1,450.0 billion against ¥1,328.2 billion, equity-method profit of ¥520.0 billion against ¥447.4 billion, and profit before tax of ¥1,220.0 billion against ¥1,087.1 billion². Most of that increase is from the businesses rather than one-off items.

The measure is the annual addition. Holding it above ¥50 billion through the investment phase would show the steady part of the business growing.