Japanese steelmaker Sumitomo Metal Industries, Ltd. (Sumitomo Metals) has announced its consolidated financial results for the first quarter (ended June 30) of FY 2011-12.
Accordingly, in the first quarter of the current Japanese financial year, Sumitomo Metals' net sales decreased by 10.2 percent year on year to JPY 306.8 billion ($3.9 billion), while it registered an operating income of JPY 16.8 billion ($215.9 million), up by 17.6 percent compared to the same quarter of the previous year. Sumitomo Metals' net income for the period in question dropped to JPY 3.2 billion ($41.13 million), decreasing 27.3 percent compared to the same period of FY 2010-11 due to the negative effects of the earthquake which hit Japan on March 11 this year.
Sumitomo Metals stated that demand for steel products in the domestic market dropped sharply during the given quarter mainly due to a decline in demand from the automotive market caused by the earthquake in March.
Sumitomo Metals' cash outflow related to the earthquake was estimated to be around JPY100 billion ($1.2 billion) including losses caused by the disaster and investment made to repair damaged facilities. According to the company statement, at least the half of that cash outflow will be replenished by reconsidering capital expenditures and reducing expenses with cost cuts.
In the given period, the crude steel production of Sumitomo Metals amounted to 2.77 million metric tons, down 17 percent as compared to Q1 FY 2010-11.