On April 14, Japanese steelmaker Sumitomo Metal Industries, Ltd. (Sumitomo Metals) announced its estimate of the loss it suffered due to the earthquake that hit eastern Japan on March 11.
(1) Impact on ordinary income
Mainly due to a decrease in sales caused by production disruption at Kashima Steelworks, Sumitomo Metals' consolidated ordinary income is expected to fall by approximately JPY 2 billion (about $24 million) for the fiscal year ended March 31, 2011.
(2) Estimate of extraordinary loss
The extraordinary loss caused by the earthquake is estimated to be approximately JPY 60 billion (about $722 million) for the fiscal year ended March 31, 2011. This includes the cost of restoring damaged facilities (including the cost to be paid after April 1, 2011), impairment loss of fixed assets, and the loss caused by production disruption and reduced capacity utilization at Kashima Steelworks during March this year.
Kashima Steelworks' damaged facilities include the coke gas holders, coke ovens, auxiliary facilities of blast furnaces, port cranes and tubes and pipes for gas, steam and water. Sumitomo Metals said it aims for Kashima's full recovery to be completed by the end of May of the current year.