MIRA INFORM REPORT

 

 

Report Date :

27.09.2012

 

IDENTIFICATION DETAILS

 

Name :

SUMITOMO CORPORATION

 

 

Registered Office :

Office Tower Y Harumi Island Triton Square, 1-8-11 Harumi Chuoku, Tokyo 104-8610

 

 

Country :

Japan

 

 

Financials (as on) :

31.03.2012

 

 

Date of Incorporation :

December 1919

 

 

Com. Reg. No.:

(Tokyo-Chuoku) 008692  

 

 

Legal Form :

Limited Company

 

 

Line of Business :

General trading house of metals, industrial machinery, energy & chemicals

 

 

No. of Employees :

74,036

 

RATING & COMMENTS

 

MIRA’s Rating :

Aa

 

RATING

STATUS

PROPOSED CREDIT LINE

71-85

Aa

Possesses adequate working capital. No caution needed for credit transaction. It has above average (strong) capability for payment of interest and principal sums

Large

 

 

Status :

Good

Payment Behaviour :

Regular

Litigation :

--

 

NOTES:

Any query related to this report can be made on e-mail: infodept@mirainform.com while quoting report number, name and date.

 

ECGC Country Risk Classification List – June 30th, 2012

 

Country Name

Previous Rating

(31.03.2012)

Current Rating

(30.06.2012)

Japan

A1

A1

 

Risk Category

ECGC Classification

Insignificant

 

A1

Low

 

A2

Moderate

 

B1

High

 

B2

Very High

 

C1

Restricted

 

C2

Off-credit

 

D

 

 

 

japan - ECONOMIC OVERVIEW

 

In the years following World War II, government-industry cooperation, a strong work ethic, mastery of high technology, and a comparatively small defense allocation (1% of GDP) helped Japan develop a technologically advanced economy. Two notable characteristics of the post-war economy were the close interlocking structures of manufacturers, suppliers, and distributors, known as keiretsu, and the guarantee of lifetime employment for a substantial portion of the urban labor force. Both features are now eroding under the dual pressures of global competition and domestic demographic change. Japan's industrial sector is heavily dependent on imported raw materials and fuels. A tiny agricultural sector is highly subsidized and protected, with crop yields among the highest in the world. Usually self-sufficient in rice, Japan imports about 60% of its food on a caloric basis. Japan maintains one of the world's largest fishing fleets and accounts for nearly 15% of the global catch. For three decades, overall real economic growth had been spectacular - a 10% average in the 1960s, a 5% average in the 1970s, and a 4% average in the 1980s. Growth slowed markedly in the 1990s, averaging just 1.7%, largely because of the after effects of inefficient investment and an asset price bubble in the late 1980s that required a protracted period of time for firms to reduce excess debt, capital, and labor. Measured on a purchasing power parity (PPP) basis that adjusts for price differences, Japan in 2011 stood as the fourth-largest economy in the world after second-place China, which surpassed Japan in 2001, and third-place India, which edged out Japan in 2011. A sharp downturn in business investment and global demand for Japan's exports in late 2008 pushed Japan further into recession. Government stimulus spending helped the economy recover in late 2009 and 2010, but the economy contracted again in 2011 as the massive 9.0 magnitude earthquake in March disrupted manufacturing. Electricity supplies remain tight because Japan has temporarily shut down almost all of its nuclear power plants after the Fukushima Daiichi nuclear reactors were crippled by the earthquake and resulting tsunami. Estimates of the direct costs of the damage - rebuilding homes, factories, and infrastructure - range from $235 billion to $310 billion, and GDP declined almost 0.5% in 2011. Prime Minister Yoshihiko NODA has proposed opening the agricultural and services sectors to greater foreign competition and boosting exports through membership in the US-led Trans-Pacific Partnership trade talks and by pursuing free-trade agreements with the EU and others, but debate continues on restructuring the economy and reining in Japan's huge government debt, which exceeds 200% of GDP. Persistent deflation, reliance on exports to drive growth, and an aging and shrinking population are other major long-term challenges for the economy.

 

 

 

Source : CIA

Company name

 

SUMITOMO CORPORATION

 

 

REGD NAME

 

Sumitomo Shoji KK

 

 

MAIN OFFICE

 

Office Tower Y Harumi Island Triton Square, 1-8-11 Harumi Chuoku, Tokyo 104-8610 JAPAN

Tel: 03-5166-5000     Fax: 03-5166-6296

 

URL:                 http://www.sumitomocorp.co.jp/

E-Mail address:            ir@sumitomocorp.co.jp (Investor Relations Div)

 

 

ACTIVITIES  

 

General trading house of metals, industrial machinery, energy & chemicals

 

 

BRANCHES

 

Osaka, Nagoya, other (Tot 24 domestic); 114 overseas in 65 countries

 

 

CHIEF EXEC

 

SUSUMU KATOH, PRES

 

Yen Amount:     In million Yen, unless otherwise stated

 

 

SUMMARY    

 

FINANCES        FAIR                 A/SALES          Yen 8,273,043 M

PAYMENTS      REGULAR         CAPITAL           Yen 219,279 M

TREND SLOW              WORTH            Yen 1,801,188 M

STARTED         1919                 EMPLOYES      74,036

 

COMMENT    

 

LEADING GENERAL TRADING HOUSE, NUCLEUS OF SUMITOMO  GROUP FIRMS. 

 

FINANCIAL SITUATION CONSIDERED FAIR AND GOOD FOR ORDINARY BUSINESSENGAGEMENTS.

 

                        Forecast (or estimated) figures for 31/03/2013 fiscal term　 (Unit in Million Yen)

 

 

HIGHLIGHTS

 

This is leading general trading house, dating back to 1919, and a nucleus of Sumitomo group firms.  Among trading houses, known for sound financial standing and stable management.  Active in multimedia field with strong CATV networks.  Has JV with TCI, largest CATV provider in US.  Holds largest share in Seiyu, a major supermarket chain operator, affiliated with Wall Mart.  Holds 50% stake in Australian Bulk Alliance Pty Ltd.  Developing large-scale coal-powered thermal power plant project in Indonesia.  Boosting power-related operations in S/E Asia.   Acquired 25% interests in uranium mine (minable reserve at 18,000 tons, annual output assumed at 1,000 tons) at Kazakhstan.  Won joint project (worth Yen 150 billion) on power generation/water desalination facilities in Bahrain.  Finished additional acquisition of shares of Jupiter Telecommunications, becoming the leading shareholder with a 40% equity stake.

 

 

FINANCIAL INFORMATION

 

The sales volume for Mar/2012 fiscal term amounted to Yen 8,273,043 million, a 0.9% down from Yen 8,349,371 million in the previous term.  The firm sys continued strong performances at its silver, zinc and lead business in Bolivia underpinned its earnings, along with contributions from its affiliates at the iron ore business in Brazil and South Africa   Exports were hurt by the strong yen, reducing export revenues and profits in Yen terms.  The recurring profit was posted at Yen 341,387 million and the net profit at Yen 263,672 million, respectively, compared with Yen 280,463 million recurring profit and Yen 209,792 million net profit, respectively, a year ago.

 

For the current term ending Mar 2013 the recurring profit is projected at Yen 357,000 million and the net profit at Yen 260,000 million, respectively, on an 2.1% fall in turnover, to Yen 8,100,000 million.  Expanded electric facilities in Indonesia and aircraft leasing will contribute.  Steel materials will be free of impact from the Thailand floods.  But resource prices will unavoidably decline.  Net profit will inch down.

           

The financial situation is considered FAIR and good for ORDINARY business engagements.

 

 

REGISTRATION

 

Date Registered:  Dec 1919

Regd No.:         (Tokyo-Chuoku) 008692

Legal Status:      Limited Company (Kabushiki Kaisha)

Authorized:         2,000 million shares

Issued:                1,250,602,867 shares

Sum:                   Yen 219,279 million

 

Major shareholders (%): Master Trust Bank of Japan T (6.6), Japan Trustee Services T (6.5), Liberty Programming Japan (3.6), Japan Trustee Services T9 (2.6), Mitsui Sumitomo Ins (2.6), Sumitomo Life Ins (2.4), Japan Trustee Services T4 (1.5), SSBT OD05 Omnibus Acct Treaty (1.4), Nippon Life Ins (1.3); foreign owners (34.8)

 

No. of shareholders: 131,819

 

Listed on the S/Exchange (s) of: Tokyo, Osaka, Nagoya, Fukuoka

 

Managements: Motoyuki Oka, ch; Susumu Kato, pres; Kazuo Ohmori, v pres; Shunichi Arai, s/mgn dir; Nobuo Kitagawa, s/mgn dir; Toyosaku Hamada, s/mgn dir; Takahiro Moriyama, s/mgn dir; Takashi Kano, s/mgn dir; Kuniharu Nakamura, s/mgn dir; Takuro Kawahara, mgn dir; Yoshio Oosawa, mgn dir (Executives will be shuffled at the general meeting at end Jun/2012)

           

Nothing detrimental is known as to the commercial morality of executives.

 

Related companies: Sumitomo Auto Lease, Sumisho Computer Systems, Sumisho Electronics, Sumitomo USA Inc, other

 

 

OPERATION

 

Activities: General trading house for import, export and wholesale of:

 

(Sales breakdown by divisions):

 

Metals Div (18%): steel, steel pipes, nonferrous metal products, metal products for automotive industries;

 

Transportation & Construction Machinery Div (15%): ships, railroad & transportation      systems, lease & auto loans for construction equipment, motor vehicles, aircraft;

 

Machinery & Electricity Div (3%): electric power, information & telecommunications, water & sewage, natural gas-related projects & pipelines;

 

Media, Electronics & Network Business Div (7%): providing infrastructure & content services with Jupiter Telecommunications Co, a cable TV operator, other;

 

Chemicals Div (8%): electronics & batteries, bio-related materials, pharmaceuticals, agricultural chemicals;

 

Mineral Resources & Energy Div (27%): copper, coal, oil, LNG;

 

Consumer Goods & Services Div (21%): foodstuff, foods, textiles, supermarket chain operations, other.

 

Overseas Trading Ratio (49%): Asia 7.5%; USA 20.6%, other N America 4.7%; Europe 11.4%; other regions 4.8%

 

Clients: [Mfrs, wholesalers] Sumitomo Metal Ind, Sumitomo Light Metal Ind, Mazda Motor, Mitsubishi Heavy Ind, Sumitomo Chemical, Nippon Oil Corp, NEC Corp, Dowa Mining, other.

 

No. of accounts: 3,000

 

Domestic areas of activities: Nationwide

Suppliers: [Mfrs, wholesalers] Sumitomo Metal Ind, Sumitomo Chemical, Sumitomo Light Metal Ind, Nippon Steel, Idemitsu Kosan Co, Mazda Motor, TonenGeneral Sekiyu, Toshiba Corp, Pan Pacific, Japan Energy, other.

 

Payment record: Regular

 

Location: Business area in Tokyo.  Office premises at the caption address are leased and maintained satisfactorily.

 

Bank References:

SMBC (Tokyo)

MUFG (H/O)

Relations: Satisfactory

 

 

FINANCES

(In Million Yen)

 

FINANCES: (Consolidated in million yen)

 

　

　

Terms Ending:

31/03/2012

31/03/2011

INCOME STATEMENT

 

 

 

  Annual Sales

　

8,273,043

8,349,371

 

  Cost of Sales

7,354,218

7,285,387

 

      GROSS PROFIT

918,825

863,994

 

  Selling & Adm Costs

698,968

678,509

 

      OPERATING PROFIT

219,857

183,485

 

  Non-Operating P/L

130,530

9,978

 

      RECURRING PROFIT

341,387

280,463

　

      NET PROFIT

263,672

209,792

BALANCE SHEET

 

 

 

 

  Cash

　

821,915

704,313

 

  Receivables

 

1,514,360

1,511,442

 

  Inventory

 

707,105

698,810

 

  Securities, Marketable

20,474

5,239

 

  Other Current Assets

426,452

569,502

 

      TOTAL CURRENT ASSETS

3,490,306

3,489,306

 

  Property & Equipment

606,855

813,135

 

  Intangibles

 

331,618

348,993

 

  Investments, Other Fixed Assets

2,797,990

2,579,068

 

      TOTAL ASSETS

7,226,769

7,230,502

 

  Payables

 

1,102,326

1,026,160

 

  Short-Term Bank Loans

632,267

850,435

 

  Other Current Liabs

438,377

466,481

 

      TOTAL CURRENT LIABS

2,172,970

2,343,076

 

  Debentures

 

2,981,548

2,916,963

 

  Long-Term Bank Loans

36,785

33,998

 

  Reserve for Retirement Allw

25,635

18,811

 

  Other Debts

　

208,643

235,564

 

      TOTAL LIABILITIES

5,425,581

5,548,412

 

      MINORITY INTERESTS

 

 

 

Common stock

219,279

219,279

 

Additional paid-in capital

282,407

288,868

 

Retained earnings

1,251,411

1,068,193

 

Evaluation p/l on investments/securities

　

　

 

Others

 

49,125

106,803

 

Treasury stock, at cost

(1,034)

(1,053)

 

      TOTAL S/HOLDERS` EQUITY

1,801,188

1,682,090

　

      TOTAL EQUITIES

7,226,769

7,230,502

CONSOLIDATED CASH FLOWS

 

 

 

 

Terms ending:

31/03/2012

31/03/2011

 

Cash Flows from Operating Activities

　

190,417

219,502

 

Cash Flows from Investment Activities

-35,696

-469,378

 

Cash Flows from Financing Activities

-33,273

155,879

　

Cash, Bank Deposits at the Term End

　

821,915

704,313

ANALYTICAL RATIOS            Terms ending:

31/03/2012

31/03/2011

 

 

Net Worth (S/Holders' Equity)

1,801,188

1,682,090

 

 

Current Ratio (%)

160.62

148.92

 

 

Net Worth Ratio (%)

24.92

23.26

 

 

Recurring Profit Ratio (%)

4.13

3.36

 

 

Net Profit Ratio (%)

3.19

2.51

 

 

Return On Equity (%)

14.64

12.47

 

FOREIGN EXCHANGE RATES

 

Currency
Unit

Indian Rupees

US Dollar

1

Rs.53.58

UK Pound

1

Rs.86.60

Euro

1

Rs.68.94

 

INFORMATION DETAILS

 

Report Prepared by :

MNL

 

RATING EXPLANATIONS

 

RATING

STATUS

 

 

PROPOSED CREDIT LINE

>86

Aaa

Possesses an extremely sound financial base with the strongest capability for timely payment of interest and principal sums

 

Unlimited

71-85

Aa

Possesses adequate working capital. No caution needed for credit transaction. It has above average (strong) capability for payment of interest and principal sums

 

Large

56-70

A

Financial & operational base are regarded healthy. General unfavourable factors will not cause fatal effect. Satisfactory capability for payment of interest and principal sums

 

Fairly Large

41-55

Ba

Overall operation is considered normal. Capable to meet normal commitments.

 

Satisfactory

26-40

B

Capability to overcome financial difficulties seems comparatively below average.

 

Small

11-25

Ca

Adverse factors are apparent. Repayment of interest and principal sums in default or expected to be in default upon maturity

 

Limited with full security

<10

C

Absolute credit risk exists. Caution needed to be exercised

 

 

Credit not recommended

----

NB

New Business

----

 

This score serves as a reference to assess SC’s credit risk and to set the amount of credit to be extended. It is calculated from a composite of weighted scores obtained from each of the major sections of this report. The assessed factors and their relative weights (as indicated through %) are as follows:

 

Financial condition (40%)            Ownership background (20%)                 Payment record (10%)

Credit history (10%)                    Market trend (10%)                                Operational size (10%)

PRIVATE & CONFIDENTIAL : This information is provided to you at your request, you having employed MIPL for such purpose. You will use the information as aid only in determining the propriety of giving credit and generally as an aid to your business and for no other purpose. You will hold the information in strict confidence, and shall not reveal it or make it known to the subject persons, firms or corporations or to any other. MIPL does not warrant the correctness of the information as you hold it free of any liability whatsoever. You will be liable to and indemnify MIPL for any loss, damage or expense, occasioned by your breach or non observance of any one, or more of these conditions

This report is issued at your request without any risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL) or its officials.