Sumitomo profit hit by trade tensions, Covid-19
Japanese trading firm Sumitomo's profit fell by almost 50pc in the 2019-20 fiscal year that ended 31 March, hit by the US-China trade dispute and a global economic slowdown caused by the Covid-19 pandemic.
Sumitomo made a profit of ¥171.4bn ($1.6bn) in the period, down by 46.5pc from ¥320.5bn a year earlier. Profit in its mineral and energy resource segment was ¥43.2bn, lower by 37pc from ¥68.5bn in 2018-19.
Impairment charges on a tight oil and shale gas project in the US amid the oil price slump weighed on 2019-20 profitability. Lower silver, zinc and lead prices also led to a loss at the Minera San Cristobal mining project in Bolivia.
Sumitomo did not provide a forecast for 2020-21 because of an uncertain market outlook. But it expects its mineral and energy resource segment to be further affected by the Covid-19 pandemic, given halts to operations at the Ambatovy nickel mine in Madagascar and the Minera San Cristobal project, as well as iron ore mining in South Africa, because of the coronavirus.
The company also expects its metal and infrastructure segments to be hit by Covid-19 in the next fiscal year, amid weakening metal demand from the domestic and overseas automobile sectors and delays to power plant construction projects.
By Nanami Oki
source: Argus Media
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