Itochu Corp’s aviation unit is set to terminate its strategic collaboration with Israeli defense company Elbit Systems Ltd by the end of February, citing the ongoing conflict in Gaza. The decision follows the World Court’s recent order for Israel to take preventive measures against acts of genocide targeting Palestinians.
Itochu’s Chief Financial Officer, Tsuyoshi Hachimura, clarified that the partnership was initially established at the request of Japan’s defense ministry for importing defense equipment necessary for the country’s security. The move is unrelated to the current Israel-Palestine conflict.
Hachimura emphasized that considering the International Court of Justice’s directive on January 26 and Japan’s support for the Court’s role, new activities related to the Memorandum of Understanding (MoU) had already been suspended. The plan is to formally end the MoU by the specified date.
The strategic cooperation MoU was signed in March 2023 by Itochu Aviation, Elbit Systems, and Nippon Aircraft Supply (NAS), preceding the outbreak of the conflict for seven months. In terms of Itochu’s other business ventures related to Israel, such as fintech investments and car sales, the company does not foresee any issues, including debt collection.
Amid a 10.3% drop in net profit for April-December due to lower coal and pulp prices, coupled with reduced gains from energy trading, Itochu remains optimistic about its full-year profit forecast of 800 billion yen through end-March. This projection, however, falls slightly below the mean estimate of 821 billion yen from a poll of nine analysts.
