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Japan's Itochu plans record 1 trillion yen investment to drive growth

Logo of Itochu Corp is seen outside the company's headquarters in Tokyo

By Yuka Obayashi

TOKYO (Reuters) -Japanese trading house Itochu said on Wednesday it will step up investment in growth segments, aiming for record spending of 1 trillion yen ($6.6 billion) in the current financial year and a 10% rise in net profit.

Unveiling its management plan for the 2024/25 year that started on April 1, Itochu - in which Warren Buffett's Berkshire Hathaway holds a minority stake - said it aims to boost profit to a record 880 billion yen from an estimated 800 billion yen in the year just ended.

"Relying solely on organic growth won't be adequate for further growth, and it's imperative that we aggressively pursue investments of a certain scale," Itochu President and Chief Operating Officer Keita Ishii told a news conference.

"We'll broaden the scope of our investment targets," he said without giving details.

The company will announce results for the 2023/24 financial year and detail its forecast for the current year, including investment plans, on May 8, he added.

Itochu's highest net investment to date was 755 billion yen in the 2020/21 year when it made a tender offer to gain greater control of convenience store chain FamilyMart, a company spokesperson said.

The company is aiming for a total shareholder return ratio of 50% this year, with a minimum dividend of 200 yen per share, up 40 yen from the previous year, and a share buyback totalling about 150 billion yen.

If realised, it would be the tenth consecutive dividend hike and a record buyback.

Itochu shares closed 6.37% higher at 6,765 yen, outperforming the Nikkei 225 index's roughly 1% loss.

Itochu has opted for a nimble one-year plan rather than its traditional three-year strategy in response to the prevailing climate of uncertainty, Ishii said.

($1 = 151.7200 yen)

(Reporting by Yuka Obayashi; Editing by Rashmi Aich, Kirsten Donovan)

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