MITSUBISHI MOTORS CORPORATION TOKYO (Reuters) - Mitsubishi Corp (>> Mitsubishi Corp) won't boost its natural resources assets on a net basis for the next three years after a commodity slump forced it to warn of its first ever annual loss, the chief executive of Japan's biggest trading house said.
"We want to adjust our portfolio of resource and non-resource assets so that we can manage a commodity slump as big as the recent one," its President and Chief Executive Officer (CEO) Takehiko Kakiuchi told Reuters in an interview on Tuesday.
"We plan not to increase our resource assets on a net basis for the next three years while we put most of our management focus on non-resource operations," he said.
The commitment to freeze its assets growth is a major change in strategy for Mitsubishi, which has invested aggressively in metals and energy over the past several years.
Still, it aims to replace some of its core resource assets such as coking coal, copper, and liquefied natural gas (LNG) with more competitive ones, though that will be funded by selling some other assets, he said.
The Tokyo-based trading house warned last month it will post its first annual loss since its founding in 1954, hurt by huge writedowns from a slump in commodities.
Like major international oil and mining companies, Mitsubishi has been caught off guard by steep falls in the prices of goods from oil to copper as China's economic growth has slowed.
As of December 2015, Mitsubishi held energy assets worth 2.2 trillion yen and metals assets of 4.3 trillion yen. The combined assets accounted 40 percent of its total assets.
The 60-year-old Kakiuchi, who took the job this month, declined to say how much non-resource assets will be added in three years, but said the firm is on track to meet its goal of doubling net profit from non-resource segments by 2020 from 180 billion yen in the year to March 2013.
Food, retail, healthcare and infrastructure are among key growth areas, he said.
Asked how he felt about Mitsubishi Motors Corp's (>> MITSUBISHI MOTORS CORPORATION) mileage scandal, Kakiuchi said: "I could only say I was aghast."
"I could not believe this could still happen."
Mitsubishi Corp is Mitsubishi Motors' second-biggest shareholder - with a 10.06 percent stake as of March 2015.
Last week, the automaker admitted to manipulating test data to overstate the fuel economy of 625,000 cars sold in Japan, and said on Tuesday it had used fuel economy testing methods that were not compliant with Japanese regulations for 25 years.
Asked whether Mitsubishi Corp will provide support to its sister company, Kakiuchi said it is not at the stage to discuss on the matter.
"We'll take necessary measures after a full account of the issue is provided."
(Reporting by Yuka Obayashi and Yoshiyasu Shida; Editing by Muralikumar Anantharaman and Louise Heavens)
By Yuka Obayashi and Yoshiyasu Shida
