February 2, 2012
The following information was originally prepared and
published by the Company in Japanese as it contains timely
disclosure materials to be submitted to the Tokyo Stock
Exchange. This English summary translation is being provided
for your convenience only. To the extent there is any
discrepancy between this English translation and the original
Japanese version, please refer to the Japanese version.
The following financial information was prepared in
accordance with generally accepted accounting
principles in Japan.
Sumitomo Metal Industries, Ltd.
Consolidated Financial Results for the Third Quarter of FY2011
Company name : Sumitomo Metal Industries, Ltd.
Listed on : Tokyo, Osaka, Nagoya, Fukuoka and Sapporo Stock Exchange
Code number : 5405
URL : http://www.sumitomometals.co.jp/e/
Contact : Toshifumi Matsui, Manager, Public Relations Group
Phone +81-3-4416-6115
(Figures less than a million yen are truncated.)
1. Highlights of Consolidated Financial Results for the First
Three Quarters of FY2011 (April 1, 2011 - December 31,
2011)
(1) Consolidated Statement of Operations (%: change from the
previous year)
Net sales | Operating income | Ordinary income | Net income /(losses) | |
First three quarters of FY2011 First three quarters of FY2010 | Million yen % 1,075,878 2.9 1,045,776 13.1 | Million yen % 57,727 45.1 39,776 - | Million yen % 56,568 110.4 26,888 - | Million yen % (37,663) - 34,929 - |
(Note) Comprehensive Income/(Losses): First three quarters of
FY2012 (44,671) million yen( - %)
First three quarters of FY2011 8,663 million yen ( - %)
Net income/(losses) per share | Net income per share after dilution | |
First three quarters of FY2011 First three quarters of FY2010 | Yen (8.12) 7.53 | Yen - - |
(2)Consolidated Balance Sheets
Total assets | Net assets | Equity ratio | |
First three quarters of FY2011 FY2010 | Million yen 2,446,278 2,440,761 | Million yen 763,835 818,080 | % 29.1 31.4 |
(Note) Shareholders' Equity: First three quarters of FY2011
711,577 million yen
FY2010 766,777 million yen
2. Dividends
(Record Date)
End of
First Quarter
End of
Second Quarter
Dividends per share
End of
Third Quarter
Year-end Total
Yen Yen Yen Yen Yen
FY2010 - 2.50 - 1.00 3.50
FY2011 - 1.00 -
FY2011(Forecasts) 1.00 2.00
(Note) Changes from the most recent dividends forecasts for
FY2011 announced previously: Yes
3. Forecasts for Consolidated Financial Performance for
FY2011 (April 1, 2011 - March 31, 2012) (%: change from
previous year)
Net sales | Operating income | Ordinary income | Net income /(losses) | Net income /(losses) per share | |
Full-year | Million yen % 1,480,000 5.5 | Million yen % 70,000 24.3 | Million yen % 55,000 61.5 | Million yen % (55,000) - | Yen (11.87) |
(Note) Changes from the most recent forecasts for
consolidated financial performance for FY2011 announced
previously: Yes
4. Others
(1) Changes in material subsidiaries during the current
period (Changes in specific subsidiaries affecting the scope
of consolidation.): None
(2) Adoption of accounting method which is peculiar to
quarterly consolidated financial statements: None
(3) Changes in the principle/procedure of accounting method
and presentation, changes in estimation related to financial
statements, and re-statement of revisions.
(i) Changes in the principle/procedure of accounting method
and presentation due to the revision of accounting standards,
etc.: None
(ii) Changes other than (i): None (iii) Changes in estimation
related to financial statements None (iv) Re-statement of
revisions None
(4) Number of issued shares (common stock)
(a) Number of shares of common stock issued and outstanding
(including treasury shares) Last day of third quarter,
FY2011: 4,805,974,238 shares
Last day of FY2010: 4,805,974,238 shares
(b) Number of treasury shares
Last day of third quarter, FY2011: 170,531,993 shares
Last day of FY2010: 170,413,839 shares
(c) The average number of shares of common stock issued and
outstanding during the period
First three quarters of FY2011: 4,635,490,984 shares
First three quarters of FY2010: 4,635,733,656 shares
(Note) This document, including the APPENDIX, is not a
subject of audit procedure under the Financial
Instruments and Exchange Law of Japan. The
consolidated quarterly financial statements are currently
under review according to the Financial Instruments and
Exchange Law of Japan.
(Note) We are scheduled to conduct a conference call for
analysts and fund managers on Thursday, February 2, 2012. We
will upload the document and a summary of Q&A on our website
(http://www.sumitomometals.co.jp/e/ir/) after the
conference.
The forecasts or targets included in this document, including
the APPENDIX, reflect the company's current beliefs and are
based upon information currently available to it.
Forward-looking statements appear in a number of places in
this document and include statements regarding our current
intent, belief, targets, forecasts or expectations or the
current intent, belief, targets, forecasts or expectations of
our management. In many, but not all cases, we used words
such as "aim," "anticipate," "believe," "estimate," "expect,"
"hope," "intend," "may," "plan," "predict," "probability,"
"risk," "should," "will," and similar expressions, as they
relate to us or our management, to identify forward-looking
statements. Forward-looking statements are not guarantees of
future performance. These statements reflect our current
views with respect to future events and are subject to risks,
uncertainties and assumptions. Should one or more of these
risks or uncertainties materialize or should underlying
assumptions prove incorrect, actual results may vary
materially from those which are anticipated, aimed at,
believed, estimated, expected, intended or planned. We
identify in our shihannki
hokokusho and financial summaries, including "1. Qualitative Information on Consolidated Financial
Results" on page 2 of the APPENDIX, important factors that
could cause these differences. Sumitomo
Metal Industries, Ltd. is under no obligation, and disclaims
any obligation, to update its
forward-looking statements whether as a result of new
information, future events or otherwise, or to advise any
changes in the assumptions and factors on which they are
based.
APPENDIX
1. | Qualitative Information on Consolidated Financial Results………………….………….……......... | 2 | |
(1) | Qualitative Information on Consolidated Financial Results during the First Three Quarters of Fiscal Year 2011……………………………………..………………………………..... | 2 | |
(2) | Qualitative Information on Financial Forecasts for Fiscal Year 2011……………….............. | 2 | |
2. | Consolidated Financial Statements……………………………………………………………………… | 3 | |
(1) | Consolidate Balance Sheets……………………….…………….………………………………..… | 3 | |
(2) | Consolidated Statement of Operations and Consolidated Statement of Comprehensive Income……………………………..………………………………………………………….…..…… | 5 | |
(3) | Notes on Going Concern Assumption……………………………………………………………… | 6 | |
(4) | Notes on Any Significant Change in Shareholders' Equity………………………..…………… | 6 | |
3. | Supplemental Information……………...……………………………………………………………….… | 7 | |
(1) | Financial Performances (Consolidated Basis)……………………………………………….…… | 7 | |
(2) | Crude Steel Production (Including Sumitomo Metals (Kokura), Ltd. and Sumikin Iron & Steel Corporation)………………………………………………………….……... | 7 | |
(3) | Export Ratio (Including Sumitomo Metals (Kokura), Ltd., Sumitomo Metals (Naoetsu), Ltd. and Sumikin Iron & Steel Corporation): Value Basis…. | 7 | |
(4) | Foreign Exchange Rate……………………………………………………………………….……… | 7 | |
(5) | Exposure to Foreign Exchange Fluctuations (Consolidated Basis)…………………………… | 8 | |
(6) | Average Price of Steel Products (Including Sumitomo Metals (Kokura), Ltd., Sumitomo Metals (Naoetsu), Ltd. and Sumikin Iron & Steel Corporation)………….……… | 8 | |
(7) | Outstanding Debt (Consolidated Basis)…………………………………………………………… | 8 | |
(8) | Analysis on Contributors to Change in Ordinary Income (Consolidated Basis)…….…….... | 8 |
- 1 -
1. Qualitative Information on Consolidated Financial
Results
(1) Qualitative Information on Consolidated Financial Results
during the First Three Quarters of
Fiscal Year 2011
During the first three quarters of Fiscal Year 2011, domestic
steel demand in Japan did not reach the level for the same
period of the last fiscal year. Domestic demand mainly for
the automotive sector picked up in the second quarter but
then showed signs of slowdown in the third quarter. Exports
decreased year-on-year due to deteriorated overseas markets
with weakness seen in the steel sheet market and the effect
of the flood in Thailand.
Under these circumstances, the Sumitomo Metals Group made
efforts to improve its profitability by reducing costs and
through other measures. Through retrenchment in various
areas, we are endeavoring to secure within the current fiscal
year, more than half of the approximately 100 billion yen of
cash that is needed for the recovery of Kashima Steel Works
from damage caused by the Great East Japan Earthquake.
For the first three quarters of Fiscal Year 2011, Sumitomo
Metals Group achieved sales of 1,075.8 billion yen (a
year-on-year increase of 30.1 billion yen), operating income
of 57.7 billion yen (a
year-on-year increase of 17.9 billion yen), and ordinary
income of 56.5 billion yen (a year-on-year increase of 29.6
billion yen). The factors behind the results include; cost
reduction efforts, profitability improvement of seamless pipe
due to firm demand, absence of negative impacts from
temporary blast furnace instability which occurred in the
previous year, rising raw material prices, and sales drop
caused by the earthquake damage on equipment. Net loss of
37.6 billion yen (a year-on-year decrease of 72.5 billion
yen) was posted mainly due to extraordinary losses such as
valuation loss caused by impairment loss on investment
securities.
With regard to the business integration with Nippon Steel
Corporation ("Nippon Steel"), we received in December 2011 a
no-action letter from the Japan Fair Trade Commission,
meaning that the business integration has been approved. Both
Sumitomo Metals and Nippon Steel are steadily moving forward
so that "Nippon Steel & Sumitomo Metal Corporation," to be
established on October 1, 2012, will become the "the Best
Steelmaker with World-Leading Capabilities."
Sumitomo Metals merged with Sumitomo Metals (Kokura) Ltd.,
which is engaged in special steel bars and wire rods
business, and Sumitomo Metals (Naoetsu), Ltd., which is
engaged in stainless and titanium business, on January 1,
2012. Through the merger, we will make our organization more
unified and will improve our management efficiency.
(2) Qualitative Information on Financial Forecasts for Fiscal
Year 2011
The business environment for the remainder of Fiscal Year
2011 remains uncertain with worries over the sluggish global
economy, due to no signs for improvement in the European
financial crisis, some slowdown seen in the Chinese economy,
and other factors. In this environment, the Sumitomo Metals
Group will strive to improve profitability by proceeding with
its after-quake recovery plan, reduction of costs, and by
taking other measures, to combat deteriorating overseas
markets, impacts of the prolonged appreciation of the yen on
our domestic customers, and an increase in imports of steel
products. For Fiscal Year 2011, we are forecasting sales of
1,480 billion yen, operating income of 70.0 billion yen,
ordinary income of 55.0 billion yen, and a net loss of 55.0
billion yen. Ordinary income is expected to be affected by a
decrease in earnings of equity-method affiliates, and net
loss is expected to result from evaluation loss on investment
securities and other factors.
These forecasts were separately disclosed in the "Notice
Regarding Revised Financial Forecasts and
Dividends Forecasts for FY2011" today.
- 2 -
2. Consolidated Financial Statements
(1) Consolidated Balance Sheets
(Million yen)
Items
At the end of previous FY
(As of March 31, 2011)
At the end of third quarter under review
(As of December 31, 2011)
(Assets)
Current assets:
Cash and deposits 83,264 16,553
Notes and accounts receivable-trade 109,571 157,562
Merchandise and finished goods 144,655 189,083
Work in process 23,476 31,824
Raw materials and supplies 230,533 257,585
Other 57,089 55,652
Allowance for doubtful accounts (660) (698) Total current
assets 647,930 707,563
Noncurrent assets:
Property, plant and equipment:
Buildings, net 262,229 264,012
Machinery, equipment and vehicles, net 413,400 395,738
Land 350,518 350,256
Other, net 91,563 100,992
Total property, plant and equipment 1,117,712 1,111,001
Intangible assets 6,208 22,750
Investment and other assets:
Investment securities 485,511 404,097
Other 183,608 201,052
Allowance for doubtful accounts (209) (186) Total investments
and other assets 668,910 604,962
Total noncurrent assets 1,792,830 1,738,714
Total assets 2,440,761 2,446,278
- 3 -
(1) Consolidated Balance Sheets (Continued)
(Million yen)
Items
At the end of previous FY
(As of March 31, 2011)
At the end of third quarter under review
(As of December 31, 2011)
(Liabilities)
Current liabilities:
Notes and accounts payable-trade 221,195 274,888
Short-term loans payable 279,818 281,332
Provision for loss on disaster 49,307 15,159
Other 250,278 211,679
Total current liabilities 800,600 783,059
Noncurrent liabilities:
Bonds payable 180,664 216,098
Long-term loans payable 572,899 614,861
Provision for retirement benefits 20,318 21,182
Provision for special repairs 197 214
Other 48,000 47,026
Total noncurrent liabilities 822,080 899,383
Total liabilities 1,622,681 1,682,442
(Net Assets)
Shareholders' equity:
Capital stock 262,072 262,072
Capital surplus 61,829 61,829
Retained earnings 565,931 518,985
Treasury stock (91,161) (91,181) Total shareholders' equity
798,671 751,706
Accumulated other comprehensive income:
Valuation difference on available-for-sale
securities
(18,877) (5,437)
Deferred gains or losses on hedges (594) (432) Revaluation
reserve for land 11,203 12,150
Foreign currency translation adjustment (23,627) (46,409)
Total accumulated other comprehensive income (31,894)
(40,129) Minority interests 51,303 52,258
Total net assets 818,080 763,835
Total liabilities and net assets 2,440,761 2,446,278
- 4 -
(2) Consolidated Statement of Operations and Consolidated
Statement of Comprehensive Income
(Consolidated Statement of Operations)
Items
First three quarters of the previous FY (April 1, 2010-
December 31, 2010
(Million yen)
First three quarters of the current FY (April 1, 2011-
December 31, 2011
Net Sales 1,045,776 1,075,878
Cost of sales 912,610 927,270
Gross profit 133,165 148,608
Selling, general and administrative expenses 93,389
90,880
Operating income 39,776 57,727
Non-operating income:
Dividends income 4,019 6,196
Equity in earnings of affiliates 3,374 11,073
Other 8,202 8,790
Total non-operating income 15,596 26,059
Non-operating expenses:
Interest expenses 11,284 9,855
Other 17,200 17,363
Total non-operating expenses 28,484 27,219
Ordinary income 26,888 56,568
Extraordinary losses:
Loss on disaster - 12,320
Loss on sales of investment securities - 1,990
Loss on valuation of investment securities - 88,643
Total extraordinary losses - 102,955
Income/(losses) before income taxes 26,888 (46,386) Income
taxes-current 10,101 7,410
Income taxes-deferred (20,341) (18,090)
Total income taxes (10,239) (10,679)
Net income/(losses) before minority interest in income
adjustment
37,127 (35,706)
Minority interests in income 2,198 1,956
Net income/(losses) 34,929 (37,663)
- 5 -
(Consolidated Quarterly Statements of Comprehensive
Income)
(Million yen)
Items
First three quarters of the previous FY (April 1, 2010-
December 31, 2010
First three quarters of the current FY (April 1, 2011-
December 31, 2011
Net income/(losses) before minority interests 37,127 (35,706)
Other comprehensive income:
Valuation difference on available-for-sale securities
(17,477) 14,391
Deferred gains on hedges 337 273
Revaluation reserve for land (643) 861
Foreign currency translation adjustment (3,940) (6,605)
Share of other comprehensive income of associates accounted
for using equity method
(6,740) (17,886)
Total other comprehensive income (28,464) (8,965)
Comprehensive income 8,663 (44,671)
(Detail)
Comprehensive income attributable to owners of the parent
7,119 (45,909) Comprehensive income attributable to minority
interests 1,544 1,237
(3) Notes on Going Concern Assumption: Not applicable.
(4) Notes on Any Significant Change in Shareholders' Equity:
Not applicable.
- 6 -
3. Supplemental Information
(1) Financial Performances (Consolidated Basis)
Forecasts for FY2011
(Billion yen)
1st quarter 2nd quarter 1st half 3rd quarter | F | orecast for | |||||
1st quarter 2nd quarter 1st half 3rd quarter | 4th quarter (approx.) | 2nd half (approx.) | Total (approx.) | ||||
Steel | 297.2 | 373.8 | 671.1 | 374.8 | 396.0 | 770.0 | 1,440.0 |
Other | 9.6 | 11.4 | 21.1 | 8.8 | 10.0 | 20.0 | 40.0 |
Net Sales | 306.8 | 385.3 | 692.2 | 383.6 | 406.0 | 790.0 | 1480.0 |
Steel | 16.4 | 22.7 | 39.1 | 15.7 | 13.5 | 29.0 | 67.0 |
Other 0.4 1.6 2.1 0.6 0.0 1.0 3.0 | |||||||
Adjustment | (0.0) | 0.0 | (0.0) | 0.0 | - | - | - |
Operating income | 16.8 | 24.4 | 41.2 | 16.4 | 13.5 | 30.0 | 70.0 |
Ordinary income | 19.0 | 22.3 | 41.3 | 15.1 | (1.0) | 14.0 | 55.0 |
Net income
/(losses)
3.2 (35.6) (32.3) (5.2) (18.0) (23.0) (55.0)
(2) Crude Steel Production (Including Sumitomo Metals (Kokura), Ltd. and Sumikin Iron & Steel Corporation)
(Million tons)
Total | |||||||
1st quarter | 2nd quarter | 1st half | 3rd quarter | 4th quarter | 2nd half | Total | |
FY2009 | 2.28 | 2.79 | 5.07 | 3.26 | 3.32 | 6.58 | 11.65 |
FY2010 | 3.35 | 3.43 | 6.78 | 3.00 | 3.13 | 6.12 | 12.90 |
FY2011 | 2.77 | 3.34 | 6.11 | 3.25 | (approx.) 3.38 | (approx.) 6.63 | (approx.) 12.74 |
(3) Export Ratio (Including Sumitomo Metals (Kokura), Ltd., Sumitomo Metals (Naoetsu), Ltd.
and Sumikin Iron & Steel Corporation): Value Basis
(%)
Total | |||||||
1st quarter | 2nd quarter | 1st half | 3rd quarter | 4th quarter | 2nd half | Total | |
FY2009 | 48 | 42 | 45 | 41 | 41 | 41 | 43 |
FY2010 | 43 | 39 | 41 | 42 | 42 | 42 | 42 |
FY2011 | 46 | 40 | 42 | 38 | (approx.) 40 | (approx.) 39 | (approx.) 41 |
(4) Foreign Exchange Rate
(Yen/US$)
Total | |||||||
1st quarter | 2nd quarter | 1st half | 3rd quarter | 4th quarter | 2nd half | Total | |
FY2009 | 97 | 94 | 95 | 90 | 91 | 90 | 93 |
FY2010 | 92 | 86 | 89 | 83 | 82 | 82 | 86 |
FY2011 | 82 | 78 | 80 | 77 | (approx.) 80 | (approx.) 79 | (approx.) 79 |
- 7 -
(5) Exposure to Foreign Exchange Fluctuations (Consolidated Basis)
FY2010 | Forecast for FY2011 |
Receipt and payment of US$ is balanced. | Excess payment of approximately US$ 0.6 billion per year. |
(6) Average Price of Steel Products (Including Sumitomo Metals (Kokura), Ltd., Sumitomo Metals (Naoetsu), Ltd. and Sumikin Iron & Steel Corporation)
(Thousand yen/ton)
Total | |||||||
1st quarter | 2nd quarter | 1st half | 3rd quarter | 4th quarter | 2nd half | Total | |
FY2009 | 109.4 | 86.8 | 96.8 | 79.0 | 84.3 | 81.7 | 88.0 |
FY2010 | 87.7 | 95.6 | 91.6 | 95.9 | 97.9 | 96.9 | 94.2 |
FY2011 | 104.5 | 107.3 | 106.0 | 103.1 | (approx.) 100 | (approx.) 101 | (approx.) 103 |
(7) Outstanding Debt (Consolidated Basis)
(Billion yen)
As of March 31,2011 | As of September 30, 2011 | As of December 31, 2011 | As of March 31, 2012 (Forecast) |
1,173.3 | 1,207.2 | 1,204.2 | approx. 1,190.0 |
(8) Analysis on Contributors to Change in Ordinary Income (Consolidated Basis)
-Foreign exchange (TTM) assumption:
79 Yen/US$ (First three quarters of FY2011)