Buried deep within Mitsubishi Corporation's recent earnings transcripts lies a tantalizing clue to the company's future, a detail that seems to have flown under the radar of most analysts. While the market fixates on the seemingly conservative profit projections for fiscal years 2024 and 2025, a closer look reveals a carefully orchestrated plan that could see Mitsubishi roar back to life in 2026, shattering profit expectations and potentially launching the company into a new era of dominance.

The linchpin of this strategy is Mitsubishi's metallurgical coal operation, often viewed as a troublesome child due to pandemic-induced labor shortages and unprecedented rainfall. Both 2023 and 2024 production volumes are projected to remain flat, excluding the recently divested mines. However, these divestments, strategically designed to consolidate Mitsubishi's holdings into the world's highest-grade assets, are only the first stage of a multi-year plan.

By 2026, Mitsubishi projects a full recovery of production volume, reaching levels last seen in 2020 and 2021. This means the company is effectively absorbing a temporary hit to its profitability, choosing to prioritize long-term stability and resource optimization over short-term gains. The implications are profound, especially considering the growing scarcity of high-grade metallurgical coal, a vital component in the increasingly critical decarbonization efforts of the steel industry.

But the coal story is only one part of the 2026 equation. Mitsubishi's liquefied natural gas (LNG) segment, a consistent profit driver, is poised for a significant boost with the launch of LNG Canada at the beginning of fiscal year 2025. The full-year contribution from this project in fiscal year 2026 will add yet another layer to Mitsubishi's burgeoning profit potential.

Adding further fuel to the fire is Mitsubishi's Power Solution segment, currently in a quiet phase of its cyclical asset model. While no major divestments are planned for 2024, the company anticipates a surge in profitability from 2025 onwards, hinting at the maturation of several key projects. Remember Nexamp, the US power generation business partially divested in 2023? This is just one example of Mitsubishi's strategic prowess in developing, nurturing, and then capitalizing on promising ventures.

These three core segments, strategically positioned for a synchronized resurgence in 2026, provide the foundation for Mitsubishi's bold dividend increase to ¥100 per share. While this move may seem aggressive in the context of the current financial landscape, it signals a deep confidence in the company's future earning power. This confidence stems from Mitsubishi's meticulously calculated “value-added cyclical growth model,” a strategy aimed at generating a sustainable profit level exceeding ¥1 trillion.

Projected Net Income Growth

The chart below illustrates a hypothetical projection of Mitsubishi's net income based on the information gleaned from the earnings transcripts. It assumes a recovery in metallurgical coal production and growth in the LNG and Power Solution segments.

Here's where the numbers get truly exciting. If Mitsubishi achieves its projected production recovery in metallurgical coal, coupled with the anticipated profit surge in LNG and Power Solutions, the company could be looking at a net income figure significantly higher than the current ¥950 billion projection for 2024. Remember, this projection already includes substantial gains from asset sales and revaluation.

Let's hypothesize. If Mitsubishi's metallurgical coal production returns to its 2020 volume of roughly 47 million tonnes, and assuming a conservative average price of $200 per tonne, this segment alone could contribute an additional ¥200 billion to the company's net income. Factor in the full-year impact of LNG Canada and the projected upswing in Power Solutions, and it's not unreasonable to imagine Mitsubishi achieving a net income closer to ¥1.2 trillion or even ¥1.3 trillion by 2026.

This is not merely a tale of optimistic projections. Mitsubishi's history is one of calculated risk, strategic foresight, and a deep understanding of global markets.

"Fun Fact: Did you know that Mitsubishi was instrumental in the development of Japan's first commercial jet airliner, the Mitsubishi Regional Jet? This pioneering spirit, coupled with a steadfast commitment to long-term value creation, makes Mitsubishi a force to be reckoned with in the years to come."

As the world navigates the complexities of a changing geopolitical and economic landscape, Mitsubishi Corporation is quietly positioning itself to not just ride the wave, but to shape it. 2026 could be the year the company reveals its full potential, leaving the market in awe of its carefully cultivated strength and ushering in a new chapter in its remarkable story.