Sumitomo raises full-year net profit outlook after debt restructuring

Sumitomo Corp announced today that the Ambatovy nickel project’s debt restructuring process was approved under UK law on November 26, 2024, and completed on December 5, 2024.

This move resulted in the full elimination of the project finance debt. However, it led to Sumi Corp booking a loss of ¥18.9 billion due to the recoverability of its loans, which was partially mitigated by a positive tax impact of ¥13.0 billion. The company now faces a limited exposure to a guarantee liability of approximately ¥5.0 billion for local bank borrowings.

Despite the financial hit from the debt restructuring, Sumi Corp reported strong earnings for the third quarter, spanning October to December 2024. The company’s profit, excluding one-off gains and losses, reached ¥141.0 billion, up from ¥119.0 billion in the second quarter and ¥103.0 billion in the same period a year earlier.

The Diverse Urban Development division was a notable performer, with profits of ¥22.0 billion, while other segments such as Energy Transportation, Transportation & Construction Systems, and Media & Digital also contributed positively to the company’s financial health.

In light of the strong third-quarter performance, Sumi Corp has revised its full-year net profit guidance for fiscal year ending March 2025 upwards by ¥30.0 billion to ¥560.0 billion. The company’s progress rate for the third quarter was high at 78.6%, and the resolution of uncertainties surrounding the Ambatovy nickel mine has allowed for this positive adjustment.

The revised forecast incorporates changes across various divisions, including Energy Transformation, Automotive, and Media & Digital, with some downward adjustments in Steel and Chemical Solutions due to the current business environment and foreign exchange rates.

Looking ahead, Sumi Corp has reaffirmed its commitment to shareholder returns. The company has maintained its dividend at ¥130 per share and signaled potential additional buybacks, stating that "further shareholder return shall be made under the shareholder return policy of total payout ratio of 40% or higher."

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