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Companies

Itochu expects 25% profit surge as food and textiles thrive

Japanese trading house snatches No. 2 slot from Mitsui

Itochu's sprawling portfolio includes processing fruits like pineapples.   © Reuters

TOKYO -- Itochu is expected to log a 25% jump in group net profit to over 500 billion yen ($4.5 billion) for the year ended March, narrowly beating projections thanks to a strong showing by its food and textile businesses.

This marks the third straight year of record profit for the Japanese trading house. Itochu overtook rival Mitsui & Co.'s 440 billion yen profit, making it the second-largest player in Japan after Mitsubishi Corp., with 640 billion yen.

The company's non-resource operations, which account for about 80% of overall profit, received a boost from consumer products like food, as well as an improved North American market for construction materials and pulp. Financial services performed strongly, while Yanase, a car importer that became a group subsidiary in 2017, also contributed to earnings.

Itochu took control of sportswear maker Descente in a hostile takeover in March. The textile business as a whole logged about 30 billion yen in net profit for the year.

Rising resource prices also lifted the trading house, which saw increased profit from iron ore and other metals, as well as from oil.

All seven of Itochu's business segments increased profits in fiscal 2018, with about 90% of about 300 group companies likely generating profits.

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