Sumitomo Corp. Warns of 100-B.-Yen Net Profit Drop

Economy

Tokyo, April 8 (Jiji Press)--Sumitomo Corp. <8053> said Wednesday that it may have to report group net profit that is some 100 billion yen lower than the currently estimated 300 billion yen for the business that ended in March, due to slumping steel tube and nonferrous metal businesses overseas amid the coronavirus pandemic.

More than 50 billion yen in net profit would possibly be wiped off by impairment losses and inventory wright-downs in the U.S. operation to supply steel tubes to oil drilling facilities, the major Japanese trading house said, citing a sharp fall in crude oil prices reflecting slowing global economic activities due to the pandemic.

In addition, Sumitomo's profit could be eroded by halts in operations at silver, zinc and lead mines in Bolivia and at a nickel mine in Madagascar as a result of strict anti-coronavirus measures, such as an outing ban, taken by various countries, the company said.

Other Japanese traders also see their business conditions deteriorating.

On Wednesday, Marubeni Corp. <8002> said it will log a record group net loss of 190 billion yen for the year through March. Last month, Mitsui & Co. <8031> warned of the possibility of booking impairment losses of 50 billion yen to 70 billion yen for the same year.

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Jiji Press