BAKU, Azerbaijan, November 13. In the first half of the fiscal year ending in 2024 (FYE 2024), ITOCHU reports a core free cash outflow of ¥341.0 billion, Trend reports.
Anticipating a dynamic second half, the company foresees a total cash outflow of approximately ¥1 trillion. This projection encompasses a ¥700.0 billion outflow for investments, covering capital expenditures (CAPEX), and the squeeze-out of CTC and DAIKEN. Additionally, ¥332.0 billion has been earmarked for committed shareholder returns.
The company underscores the transparency of this financial outlook, asserting its clarity to external stakeholders. With an accumulated investment pipeline exceeding ¥1 trillion, ITOCHU conducts meticulous analyses, considering factors such as potential synergy, timing of investments, and projected profit contributions from the following fiscal year onward.
Deliberating investments involves the rigorous scrutiny of the Investment Consultative Committee, which consistently applies stringent investment discipline. Before discussing cash allocation, ITOCHU assesses investments linked to overall profit growth and holds deliberations to validate the accuracy of projected profit contributions in the subsequent fiscal year. The company assumes positive core free cash flows post the deduction of shareholder returns during the current medium-term management plan, intending to maintain balance sheet control suitable for A ratings and highly efficient business generating approximately 13–16% Return on Equity (ROE).
ITOCHU has outlined a cash allocation strategy that prioritizes growth investments, shareholder returns, and the management of interest-bearing debt. As the company looks toward the next fiscal year, decisions on cash allocation will be contingent on the evaluation of profit growth and future investments.
Additionally, ITOCHU incorporates a conservative loss buffer of ¥30.0 billion in the revised forecast for FYE 2024. This precautionary measure accounts for the possibility that investments expected to yield profit contributions during the fiscal year might extend into subsequent periods. The scale of growth investments for the fiscal year onward is subject to change based on the progress of investments in the second half of FYE 2024.
ITOCHU is currently in the process of deliberating its shareholder return policy, with an official announcement expected in May 2024, urging stakeholders to await further details on this matter.
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