MIRA INFORM REPORT

 

 

Report Date :

08.10.2014

 

IDENTIFICATION DETAILS

 

Name :

SUMITOMO CORPORATION

 

 

Registered Office :

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

 

 

Country :

Japan

 

 

Financials (as on) :

31.03.2014

 

 

Date of Incorporation :

December, 1919

 

 

Com. Reg. No.:

(Tokyo-Chuoku) 008692

 

 

Legal Form :

Limited Company (Kabushiki Kaisha)

 

 

Line of Business :

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

 

 

No. of Employees :

75,099

 

 

RATING & COMMENTS

 

MIRA’s Rating :

A

 

 

RATING

STATUS

PROPOSED CREDIT LINE

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

 

Maximum Credit Limit :

Yen 177,154.3 million

Status :

Good

Payment Behaviour :

Regular

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

 

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 Division)

 

 

ACTIVITIES  

 

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

 

 

BRANCHES   

 

Osaka, Nagoya, other (Tot 24 domestic); 115 overseas in 66 countries

 

 

CHIEF EXEC 

 

KUNIHARU NAKAMURA, PRES

 

 

Yen Amount

 

In million Yen, unless otherwise stated

 

 

SUMMARY    

 

FINANCES        FAIR                 A/SALES          Yen 8,146,184 M

PAYMENTS      REGULAR         CAPITAL           Yen 219,279 M

TREND UP                    WORTH            Yen 2,540,184 M

STARTED         1919                 EMPLOYES      75,099

 

 

COMMENT    

 

LEADING GENERAL TRADING HOUSE, NUCLEUS OF SUMITOMO GROUP FIRMS. 

FINANCIAL SITUATION CONSIDERED FAIR AND GOOD FOR ORDINARY

BUSINESSENGAGEMENTS.

 

MAX CREDIT LIMIT: YEN 177,154.3 MILLION, 30 DAYS NORMAL TERMS.

 

 

Business

Terms Ending

Annual Sales*

R.Profit*

N.Profit*

S.Growth

Net Worth*

   Results:

31/03/2011

8,349,371

280,463

200,222

(%)

1,682,090

(Consolidated)

31/03/2012

8,273,043

341,387

250,669

-0.91

1,801,188

31/03/2013

7,502,724

319,021

243,695

-9.31

2,175,882

31/03/2014

8,146,184

304,246

233,858

8.58

2,540,184

31/03/2015

8,600,000

332,000

250,000

5.57

..

Forecast (or estimated) figures for 31/03/2015 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.  The company will restructure management of TBC, a struggling US tire sales firm, including through store closures and business systems replacements, and aims to book a profit from 2014.  It acquired a leading US steel materials and steel pipes wholesaler for around Yen 50 billion. 

 

 

FINANCIAL INFORMATION

 

The sales volume for Mar/2014 fiscal term amounted to Yen 8,146,184 million, an 8.6% up from Yen 7,502,754 million in the previous term.  The automobile financing business grew in Japan and overseas.  Steel pipes trading benefitted from robust resource development in North America.  The recurring profit was posted at Yen 304,246 million and the net profit at Yen 233,858 million, respectively, compared with Yen 319,021 million recurring profit and Yen 243,695 million net profit, respectively, a year ago.

 

For the current term ending Mar 2015 the recurring profit is projected at Yen 332,000 million and the net profit at Yen 250,000 million, respectively, on a 5.6% rise in turnover, to Yen 8,600,000 million.  The steel pipes and automobile businesses will drive sales growth.

           

The financial situation is considered FAIR and good for ORDINARY business engagements. Max credit limit is estimated at Yen 177,154.3 million, on 30 days normal terms.              

 

 

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 (6.2), Japan Trustee Services T (5.3), Liberty Programming Japan (3.6), Sumitomo Life Ins (2.4), Mitsui Sumitomo Ins (2.1), 1apan Trustee Services T9 (1.6), Barclays Securities Japan (1.5), Chase London SL Omnibus Acct (1.5), Bank of New York Treaty Jasdec (1.2), Dai-ichi Life Ins (1.2); foreign owners (34.0)

 

No. of shareholders: 138,480

 

Listed on the S/Exchange (s) of: Tokyo

 

Managements: Kazuo Ohmori, ch; kuniharu Nakamura, pres; Shin’ichi Sasaki, v pres; Takuro Kawahara, v pres; azuhisa Togashi, v pres; Yasuyuki Abe, s/mgn dir; Naoki Hidaka, s/mgn dir; Toru Furihata, s/mgn dir; Hiroyuki Inohara, s/mgn dir; Michihiko Kanegae, s/mgn dir

           

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 (19%): steel, steel pipes, nonferrous metal products, metal products for automotive industries;

Transportation & Construction Machinery Div (13%): ships, railroad & transportation         systems, lease & auto loans for construction equipment, motor vehicles, aircraft;

            Machinery & Electricity Div (2%): electric power, information &

            Tele-communications, water & sewage, natural gas-related projects & pipelines;

            Media, Electronics & Network Business Div 9%): providing infrastructure & content          services with Jupiter Telecommunications Co, a cable TV operator, other;

Chemicals Div (5%): electronics & batteries, bio-related materials, pharmaceuticals, agricultural chemicals;

            Mineral Resources & Energy Div (22%): copper, coal, oil, LNG;

            Consumer Goods & Services Div (30%): foodstuff, foods, textiles, supermarket chain operations, other.

            Overseas Trading Ratio (50%)

 

Clients: [Mfrs, wholesalers] Sumitomo Communication Global Commodities Ltd, Nippon Steel & Sumitomo Metal Corp, Sumitomo Metal Mining, Sumisho Materials Corp, Mitsubishi Materials, Chung Hung Steel, PT Hino Motors Manufacturing Indonesia, Idemitsu Kosan Kaisha, Kansai Electric Power, Sumitomo Chemical, other.

            No. of accounts: 3,000

            Domestic areas of activities: Nationwide

Suppliers: [Mfrs, wholesalers] Sumitomo Communication Global Commodities Ltd, Nippon Steel & Sumitomo Metal Corp, Sumisho Materials Corp, Sumitomo Metal Mining, Oshima Shipbuilding Co, Petro Summit Pte Ltd, Hino Motors, Idemitsu Kosan Kaisha, Mitsubishi Material, TonenGeneral Sekiyu, Toshiba Corp, 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:

31/03/2014

31/03/2013

INCOME STATEMENT

  Annual Sales

　

8,146,184

7,502,724

  Cost of Sales

7,254,768

6,675,762

      GROSS PROFIT

894,416

826,962

  Selling & Adm Costs

722,666

664,481

      OPERATING PROFIT

171,750

162,481

  Non-Operating P/L

132,496

156,540

      RECURRING PROFIT

304,246

319,021

　

      NET PROFIT

233,858

243,695

BALANCE SHEET

  Cash

　

1,111,192

924,513

  Receivables

1,549,363

1,470,942

  Inventory

872,030

770,450

  Securities, Marketable

33,683

29,653

  Other Current Assets

373,230

351,298

      TOTAL CURRENT ASSETS

3,939,498

3,546,856

  Property & Equipment

921,157

821,981

  Intangibles

367,906

279,809

  Investments, Other Fixed Assets

3,440,177

3,204,111

      TOTAL ASSETS

8,668,738

7,852,757

  Payables

1,076,713

1,080,699

  Short-Term Bank Loans

876,379

695,665

　

　

　

  Other Current Liabs

416,732

400,221

      TOTAL CURRENT LIABS

2,369,824

2,176,585

  Debentures

3,362,553

3,165,737

  Long-Term Bank Loans

　

　

  Reserve for Retirement Allw

29,353

38,509

  Other Debts

　

366,824

276,044

      TOTAL LIABILITIES

6,128,554

5,656,875

      MINORITY INTERESTS

Common stock

219,275

219,275

Additional paid-in capital

268,332

269,285

Retained earnings

268,332

269,285

Evaluation p/l on investments/securities

346,222

173,044

Others

1,441,975

1,245,225

Treasury stock, at cost

(3,952)

(232)

      TOTAL S/HOLDERS` EQUITY

2,540,184

2,175,882

　

      TOTAL EQUITIES

8,668,738

7,832,757

CONSOLIDATED CASH FLOWS

Terms ending:

31/03/2014

31/03/2013

Cash Flows from Operating Activities

　

78,237

80,305

Cash Flows from Investment Activities

-249,852

-186,203

Cash Flows from Financing Activities

145,908

-24,667

　

Cash, Bank Deposits at the Term End

　

1,111,192

924,513

ANALYTICAL RATIOS            Terms ending:

31/03/2014

31/03/2013

Net Worth (S/Holders' Equity)

2,540,184

2,175,882

Current Ratio (%)

166.24

162.96

Net Worth Ratio (%)

29.30

27.78

Recurring Profit Ratio (%)

3.73

4.25

Net Profit Ratio (%)

2.87

3.25

Return On Equity (%)

9.21

11.20

 

 

FOREIGN EXCHANGE RATES

 

Currency
Unit

Indian Rupees

US Dollar

1

Rs.61.36

UK Pound

1

Rs.98.71

Euro

1

Rs.77.47 

 

INFORMATION DETAILS

 

Report Prepared by :

SMN

 

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.