On July 15, Japanese steelmaker Sumitomo Metals (Sumitomo) reported a net loss of JPY 7 billion ($88.5 million) for the fiscal year starting April 1, 2010 and ending March 31, 2011. According to its report, the major earthquake which hit Japan in March this year caused Sumitomo to suffer an extraordinary loss of JPY 62 billion ($784 million) in FY 2010-11.
In FY 2010-11 Sumitomo's crude steel production amounted to 12.9 million mt, up 11 percent compared to the previous year. Especially, automotive and other manufacturing sectors were strong in the first half and the core operation of seamless pipe recovered steadily throughout the year.
In the fiscal year 2010-11, the sales volume for steel products recovered and net sales amounted to JPY 1.402 trillion ($17.7 billion), up nine percent compared to the previous year. The operating income is registered as JPY 56 billion ($708 million) thanks to a turnaround in sales volume and cost reduction.
In terms of outlook for fiscal year 2011-12 (ending March 2012), demand for steel products is expected to continue to increase in overseas markets but the overall trends of the Japanese domestic economy is uncertain, mainly due to the impact of the Great East Japan Earthquake.
Cash demand of Sumitomo to recover from the damage caused by the earthquake is estimated to be approximately JPY 100 billion ($1.2 billion). The company plans to replenish at least half of that outflow within FY 2011-12, by cutting spending in all other areas, including the revision of investment plans and a reduction in costs and expenses.