Sumitomo Metals Launches 100 Billion yen Recovery Plan

Sumitomo Metal Industries announced on Thursday the firm launched 100 billion yen recovery plan from the major earthquake damage. The firm estimated 84 billion yen of impact on profit before tax for 2 years through fiscal 2011 ending March 2012. The firm plans around 20 billion yen of capital expenditure to repair the damaged facilities through fiscal 2011. The firm plans to secure more than 50 billion yen of the fund by reducing immediate cash out.

Sumitomo Metals posted 34 billion yen of consolidated recurring profit for fiscal 2010, which returned to the profit for the first time in 2 years. The firm posted the profit due to 345.1 billion yen of positive impacts including inventory evaluation gain and higher steel shipment while the negative impact was 274.5 billion yen including higher raw materials cost. However, the firm posted net loss for 2 years in a row due to 62 billion yen of onetime loss for the quake damage on Kashima steel works.

Sumitomo Metals reduces its dividend by 1.5 yen to 3.5 yen per share for fiscal 2010 from fiscal 2009 when the firm plans to secure the funds for the recovery plan. The firm plans 1 yen of dividend for first half of fiscal 2011, which is 1.5 yen lower from a year earlier, while the firm failed to disclose the results forecast for fiscal 2011.