Marubeni Q1 ags profit fall on weaker ethanol demand for Gavilon

Marubeni reported weaker financial results from its agricultural business during the first quarter of its fiscal year because of weaker profits from subsidiary Gavilon.

Total revenue generated by the Japan-headquartered conglomerate’s agricultural business - the biggest segment by revenue size - totalled JPY794 billion ($7.07 billion) for the three months to the end of June, down more than 7% on the same quarter of 2019, according to Marubeni’s financial report published Tuesday.

Trading profits from the segment of JPY57 billion ($538 million) for the quarter were down 1.5% year-on-year.

“Gross trading profit decreased... because of decreased revenue from the Gavilon grain business, mainly as a result of weaker demand for ethanol,” the company said.

Still, net profit for Marubeni’s agribusiness gained nearly 1% to JPY15.3 billion ($144 million) thanks to “an improvement in interest expense-net”, it added.

Overall, total revenue for Marubeni of nearly JPY1.59 trillion ($14.98 billion) for the quarter was nearly 17% lower than that for the same quarter last year.

Gross trading profits across all segments during the quarter of JPY179 billion ($1.69 billion) were down 7% year-on-year.

Marubeni’s fiscal year starts in April each year and finishes at the end of March the following year.