Japan's Itochu to end cooperation with Israel's Elbit amid Gaza war

Itochu Corp's 8001.T aviation unit will end its strategic cooperation with Israeli defence company Elbit Systems Ltd ESLT.TA by the end of February amid the war in Gaza, the Japanese trading house's executive said on Monday.

Itochu plans to end the collaboration after the International court of Justice ordered Israel last month to prevent acts of genocide against Palestinians and do more to help civilians, Itochu Chief Financial Officer Tsuyoshi Hachimura said.

"The partnership is based on a request from the Japan's defense ministry for the purpose of importing defense equipment for the Self-Defense Forces necessary for Japan's security, and is not in any way related to the current conflict between Israel and Palestine," Hachimura told an earnings press conference.

Company cites ICJ ruling

"Taking into consideration the International Court of Justice's order on January 26, and that the Japanese government supports the role of the Court, we have already suspended new activities related to the MOU, and plan to end the MOU by the end of February," he said.

Itochu Aviation, Elbit Systems and Nippon Aircraft Supply (NAS) signed the strategic cooperation memorandum of understanding (MoU) in March 2023, seven months before the outbreak of the war.

As for Israel-related business, Itochu has small fintech investments and a car sales business, but it faces no problems with debt collection or other issues, Hachimura said.

Itochu reported a 10.3% drop in April-December net profit due to lower prices of coal and pulp as well as smaller gains from energy trading.

It posted a profit of 611.7 billion yen ($4.1 billion) in the nine months through Dec. 31 compared with 682.2 billion yen a year earlier.

The trading company stuck to its full-year profit forecast through end-March of 800 billion yen, below the 821 billion yen mean estimate in a poll of 9 analysts compiled by LSEG.