MIRA INFORM REPORT

 

 

Report Date :

02.10.2014

 

IDENTIFICATION DETAILS

 

Name :

NIPPON STEEL & SUMITOMO METAL CORPORATION

 

 

Registered Office :

2-6-1 Marunouchi Chiyodaku Tokyo 100-8701

 

 

Country :

Japan

 

 

Financials (as on) :

31.03.2014

 

 

Date of Incorporation :

April, 1950

 

 

Com. Reg. No.:

0100-01-008848 (Tokyo-Chiyodaku)

 

 

Legal Form :

Limited Company (Kabushiki Kaisha)

 

 

Line of Business :

Manufacturing of Crude Steel.

 

 

No. of Employees :

23,741

 

 

RATING & COMMENTS

 

MIRA’s Rating :

Ba

 

RATING

STATUS

PROPOSED CREDIT LINE

41-55

Ba

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

Satisfactory

 

Maximum Credit Limit :

YEN 181,366.2 MILLION

 

 

Status :

Satisfactory

 

 

Payment Behaviour :

No Complaints

 

 

Litigation :

Clear

 

 

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 1, 2014

 

Country Name

Previous Rating

(31.03.2014)

Current Rating

(01.06.2014)

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 small agricultural sector is highly subsidized and protected, with crop yields among the highest in the world. While self-sufficient in rice production, Japan imports about 60% of its food on a caloric basis. 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. Modest economic growth continued after 2000, but the economy has fallen into recession three times since 2008. A sharp downturn in business investment and global demand for Japan's exports in late 2008 pushed Japan 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 and the ensuing tsunami in March disrupted manufacturing. The economy has largely recovered in the two years since the disaster, but reconstruction in the Tohoku region has been uneven. Prime Minister Shinzo ABE has declared the economy his government's top priority; he has overturned his predecessor's plan to permanently close nuclear power plants and is pursuing an economic revitalization agenda of fiscal stimulus, monetary easing, and structural reform. Japan joined the Trans Pacific Partnership negotiations in 2013, a pact that would open Japan's economy to increased foreign competition and create new export opportunities for Japanese businesses. Measured on a purchasing power parity (PPP) basis that adjusts for price differences, Japan in 2013 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 2012. The new government will continue a longstanding debate on restructuring the economy and reining in Japan's huge government debt, which is exceeding 230% of GDP. To help raise government revenue and reduce public debt, Japan decided in 2013 to gradually increase the consumption tax to a total of 10% by the year 2015. Japan is making progress on ending deflation due to a weaker yen and higher energy costs, but reliance on exports to drive growth and an aging, shrinking population pose other major long-term challenges for the economy.

 

Source : CIA

Company Name and Address

 

NIPPON STEEL & SUMITOMO METAL CORPORATION

 

REGD NAME:    Shinnittetsu Sumikin KK

 

MAIN OFFICE:  2-6-1 Marunouchi Chiyodaku Tokyo 100-8701 JAPAN

Tel: 03-6867-4111     Fax: 03-6867-5607

 

*.. The is its Osaka Office (including subsidiary)     -

 

URL:          http://www.nssmc.com

E-Mail address: (thru the URL)

 

 

ACTIVITIES

 

Crude steel manufacturing

 

 

BRANCHES   

 

13 locations nationwide

 

OVERSEAS

 

Worldwide (17 locations in 8 countries)

 

 

FACTORIES

 

Kashima, Kimitsu, Tokai, Wakayama, Himeji, Kitakyushu, other (Tot 13)

 

 

CHIEF EXEC

 

KOSEI SHINDO, PRES

 

Yen Amount:     In million Yen, unless otherwise stated

 

 

SUMMARY

 

FINANCES        FAIR                 A/SALES          Yen 5,516,180 M

PAYMENTSREGULAR   CAPITAL           Yen 419,524 M

TREND UP                    WORTH            Yen 3,237,995 M

STARTED         1950                 EMPLOYES      23,741

 

 

COMMENT

 

CRUDE STEEL MANUFACTURER 

 

FINANCIAL SITUATION COSIDERED FAIR AND GOOD FOR ORDINARY BUSINESS ENGAGEMENTS.

                       

MAX CREDIT LIMIT: YEN 181,366.2 MILLION, 30 DAYS NORMAL TERMS

 

 

Unit: In Million Yen

Forecast figures for the 31/03/2015 fiscal term.

 

 

HIGHLIGHTS

 

This is the Japan’s largest crude steel mfr.  Made new start thru megamerger between Yawata and Fuji iron & steelmakers.  Has close tie with Pohang Iron & Steel (POSCO) of S Korea.  Merged with Sumitomo Metal Ind in Oct 2012.  Has equity method-applied steelmaker in Brazil.

 

 

FINANCIAL INFORMATION

 

The sales volume for Mar/2014 fiscal term amounted to Yen 5,516,180 million, a 25.7% up from Yen 4,389,922 million in the previous term.  Sales were brisk, thanks to full-term contribution of merger with Sumitomo Metal Industries.  The recurring profit was posted at Yen 361.097 million and the net profit at Yen 242,753 million, respectively, compared with Yen 78,931 million recurring profit and Yen 124,967 million net losses, respectively, a year ago.

 

(Apr/Jun/014 results): Sales Yen 1,361,401 million (up 5.8%), operating profit Yen 59,831 million (up 6.4%), recurring profit Yen 74,319 million (down 14.0%), net profit Yen 48,340 million (down 23.8%).  (% compared with the corresponding period a year ago)

 

For the current term ending Mar 2015 the recurring profit is projected at Yen 450,000 million and the net profit at Yen 260,00 million, respectively, on a 3.3% rise in turnover, to Yen 5,700,000 million. 

 

The financial situation is considered FAIR and good for ORDINARY business engagements.  Max credit limit is estimated at Yen 181,366.2 million, on 30 days normal terms.

 

 

REGISTRATION

           

Date Registered:　     Apr 1950

Regd No.:                      0100-01-008848 (Tokyo-Chiyodaku)

Legal Status:               Limited Company (Kabushiki Kaisha

Authorized:                  20,000 million shares

Issued:                          9,503,214,022 shares

Sum:                            Yen 419,524 million

 

Major shareholders (%): Japan Trustee Services T (4.3), Company’s Treasury Stock (3.8), Master Trust Bank of Japan T (3.2), Nippon Life Ins (2.8), Sumitomo Corp (2.7), Mizuho Bank (1.9), SMBC (1.5), Meiji Yasuda Life Ins (1.4), MUFG (1.4), Kobe Steel (1.4); foreign owners 25.6)

 

No. of shareholders: 429,346

 

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

 

Managements: Shoji Muneoka, ch; Kosei shindo, pres; Hiroshi Tomono, v ch; Masaya Hida, v pres; Katsuhiko Ota, v pres; Akihiro Miyasaka, v pres; Kinya Yanagawa, v pres; oichiro Sakuma, v pres; Yasumitsu Saeki, mgn dir; Shinji Morishin, mgn dir

 

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

 

Related companies: Nippon Steel & Sumikin Engineering, Nippon Steel & Sumikin   Solutions, Nippon Steel & Sumikin Steel Plate, other.

 

 

OPERATION

           

Activities: Crude steel manufacturing: steelmaking (88%), engineering (5%), chemicals (4%), new materials (1%), systems solutions (3%)

 

Overseas Sales Ratio (40%)

 

(Products): Plate, flat products, bar & wire rod, construction products, pipe & tube, railway, automotive & machinery parts, titanium & specialty stainless steel, stainless steel, other

           

Clients: [Mfrs, wholesalers] Sumitomo Corp, Metal One, Marubeni Itochu Steel, Toyota

Tsusho Corp, Mitsui & Co, other

No. of accounts: 1,000-2,000

Domestic areas of activities: Nationwide

 

Suppliers: [Mfrs, wholesalers] Mitsui & Co, Mitsui Bussan Metals, Mitsubishi Corp, other

 

Payment record: No Complaint’s

 

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

 

Bank References:

                        Mizuho Bank (H/O)

                        MUFG (H/O)

                        Relations: Satisfactory

 

 

FINANCES

(In Million Yen)

 

FINANCES: (Consolidated in million yen)

　

　

　

Terms Ending:

31/03/2014

31/03/2013

INCOME STATEMENT

 

　

　

  Annual Sales

　

5,516,180

4,389,922

　

  Cost of Sales

4,760,308

3,982,362

　

      GROSS PROFIT

755,872

407,559

　

  Selling & Adm Costs

457,482

387,449

　

      OPERATING PROFIT

298,390

20,110

　

  Non-Operating P/L

62,707

56,821

　

      RECURRING PROFIT

361,097

76,931

　

      NET PROFIT

242,753

-124,567

BALANCE SHEET

 

 

　

　

  Cash

　

105,303

89,350

　

  Receivables

 

589,802

579,562

　

  Inventory

 

1,225,014

1,156,934

　

  Securities, Marketable

8,025

8,024

　

  Other Current Assets

345,227

276,864

　

      TOTAL CURRENT ASSETS

2,273,371

2,110,734

　

  Property & Equipment

2,612,280

2,685,500

　

  Intangibles

 

94,079

95,928

　

  Investments, Other Fixed Assets

2,102,558

2,197,336

　

      TOTAL ASSETS

7,082,288

7,089,498

　

  Payables

 

661,267

596,230

　

  Short-Term Bank Loans

435,357

494,903

　

　

 

　

　

　

  Other Current Liabs

714,513

889,991

　

      TOTAL CURRENT LIABS

1,811,137

1,981,124

　

  Debentures

 

425,668

504,659

　

  Long-Term Bank Loans

1,313,248

1,346,219

　

  Reserve for Retirement Allw

157,373

192,635

　

  Other Debts

　

136,867

126,578

　

      TOTAL LIABILITIES

3,844,293

4,151,215

　

      MINORITY INTERESTS

 

　

　

Common stock

419,524

419,524

　

Additional paid-in capital

371,465

362,321

　

Retained earnings

1,652,054

1,430,876

　

Evaluation p/l on investments/securities

189,831

168,611

　

Others

 

668,003

627,441

　

Treasury stock, at cost

(62,882)

(70,490)

　

      TOTAL S/HOLDERS` EQUITY

3,237,995

2,938,283

　

      TOTAL EQUITIES

7,082,288

7,089,498

CONSOLIDATED CASH FLOWS

 

　

　

 

Terms ending:

31/03/2014

31/03/2013

　

Cash Flows from Operating Activities

　

574,767

313,317

　

Cash Flows from Investment Activities

-198,856

-327,336

　

Cash Flows from Financing Activities

-367,115

33,332

　

Cash, Bank Deposits at the Term End

　

105,464

90,530

ANALYTICAL RATIOS            Terms ending:

31/03/2014

31/03/2013

　

 

Net Worth (S/Holders' Equity)

3,237,995

2,938,283

　

 

Current Ratio (%)

125.52

106.54

　

 

Net Worth Ratio (%)

45.72

41.45

　

 

Recurring Profit Ratio (%)

6.55

1.75

　

 

Net Profit Ratio (%)

4.40

-2.84

　

　

Return On Equity (%)

7.50

-4.24

 

 

           


 

FOREIGN EXCHANGE RATES

 

Currency
Unit

Indian Rupees

US Dollar

1

Rs.61.75

UK Pound

1

Rs.100.07

Euro

1

Rs.77.95

 

INFORMATION DETAILS

 

Analysis Done by :

DIV

 

 

Report Prepared by :

NIT

 

               

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.