MIRA INFORM REPORT

 

 

Report Date :

14.10.2014

 

IDENTIFICATION DETAILS

 

Name :

SUMITOMO ELECTRIC INDUSTRIES LTD

 

 

Registered Office :

4-5-33 Kitahama Chuoku Osaka 541-0041

 

 

Country :

Japan

 

 

Financials (as on) :

31.03.2014

 

 

Date of Incorporation :

August 1911

 

 

Com. Reg. No.:

1200-01-077450

 

 

Legal Form :

Limited Company

 

 

Line of Business :

Manufactures Electric Wires & Cables

 

 

No of Employees :

232,936

 

 

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

 

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 & address

 

SUMITOMO ELECTRIC INDUSTRIES LTD

 

 

REGD NAME

 

Sumitomo Denki Kogyo KK

 

 

MAIN OFFICE

 

4-5-33 Kitahama Chuoku Osaka 541-0041 Japan

Tel: 06-6220-4141     Fax: 06-6222-3380

 

*.. The is of its Tokyo Head Office

                       

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

E-Mail address: (thru the URL)

 

ACTIVITIES:     Mfg of electric wires & cables

BRANCH (ES):  Tokyo, Nagoya, Fukuoka, Hiroshima, Sendai, Sapporo,

                        Okinawa, Toyota, Kanazawa, Takamatsu (Tot 10)

OVERSEAS:     USA, Europe, Asia, other (Tot 380 over 400 countries, including

                        Subsidiaries/affiliates)

FACTORIES:    Osaka, Itami (Hyogo-Pref), Yokohama; overseas

 

CHIEF EXEC:   MASAYOSHI MATSUMOTO, PRES

 

Yen Amount:     In million Yen, unless otherwise stated

 

SUMMARY

 

FINANCES        FAIR                             A/SALES          Yen 2,568,779 M

PAYMENTSREGULAR               CAPITAL           Yen 99,737 M

TREND UP                                WORTH                        Yen 1,379,912 M

STARTED         1911                             EMPLOYES      232,936

 

COMMENT:      MFR OF ELECTRIC WIRES & CABLES.  FINANCIAL SITUATION COSIDERED FAIR AND

GOOD FOR  ORDINARY BUSINESS ENGAGEMENTS

                                               

 

Unit: In Million Yen

Forecast (or estimated) figures for 31/03/2015 fiscal term

 

 

HIGHLIGHTS

 

The subject company was established on the basis of electric wire business spun off from Sumitomo family’s rolled copper business.  This is a core company of Sumitomo Group.  World’s No.3 maker of wire harnesses for automobiles, and 4th ranked player in telecom infrastructure products including optical fiber.  Developing businesses expressed by three keywords of infrastructure (basic to society), mobility (facilitating information & product movement), and interface (linking differing items).   Production bases are wide and varied worldwide with subsidiaries engaged in the production.

 

 

FINANCIAL INFORMATION

 

The sales volume for Mar/2014 fiscal term amounted to Yen 2,568,779 million, an 18.9% up from Yen 2,159,942 million in the previous term.  Sales of automobile-use wire harnesses in North America were robust.  Sales of telecom-use products emerged, backed by a weaker Yen.  Extension works and power conditioners contributed to profit.  The recurring profit was posted at Yen 145,354 million and the net profit at Yen 66,748 million, respectively, compared with Yen 94,116 million recurring profit and Yen 37,955 million net profit, respectively, a year ago 

 

(Apr/Jun/2014 results): Sales Yen 638,170 million (up 8.7%), operating profit Yen 21,779 million (up 12.2%), recurring profit Yen 29,804 million (up 12.0%, net profit Yen 26,876 million (up 69.1%).  (% as compared with the corresponding period a year ago). 

 

For the current term ending Mar 2015 the recurring profit is projected at Yen 142,000 million and the net profit at Yen 111,000 million, on a 5.1% rise in turnover, to Yen 2,700,000 million.  Parts for automobiles, such as wire harnesses, will be active. 

 

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

 

 

REGISTRATION

 

Date Registered:           Aug 1911

Regd No.:                                 1200-01-077450 (Osaka-Chuoku)

Legal Status:                Limited Company (Kabushiki Kaisha)

Authorized:                  3,000 million shares

Issued:                         793,940,571 shares

Sum:                             Yen 99,737 million

           

Major shareholders (%): Master Trust Bank of Japan T (6.5), Japan Trustee Services T (6.1), Nippon Life Ins (3.3), Sumitomo Life Ins (1.9), SMBC (1.5), Chase London Omnibus Acct (1.5), Japan Trustee Services T4 (1.3), State Street Bank & Trust 505225 (1.3), Bank of New York Mellon SANV 10 (1.2), Nomura Trust Inv T (1.2); foreign owners (41.1)

           

No. of shareholders: 56,280

 

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

 

Managements: Masayoshi Matsumoto, pres; Hiroyuki Takenaka, v pres; Fumikiyo Uchioke, v pres; Mitsuo Nishida, v pres; Shigeru Tanaka, s/mgn dir; Makoto Nakajima, s/mgn dir; Atsushi Yano, mgn dir; Fumiyoshi Kawai, mgn dir; Nozomi Ushijima, mgn dir; Shigeo Saito, mgn dir; Junji Ito, mgn dir; Makoto Tani, mgn dir; Yoshitomo Kasui, mgn dir; Kazuo Hiramatsu, dir

           

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

 

Related companies: Sumitomo Wiring Systems, Sumitomo Densetsu, Tokai Carbon Co, other (Tot 380 domestic/overseas over 40 countries, primarily in Asia, America & Europe)

 

 

OPERATION

           

Activities: Manufactures electric wires & cables:

 

(Sales Breakdown by Divisions):

 

Automotive Div (53%): wiring harness, connector, wheel speed sensor, center cluster integration panel, front side monitoring cameras;

Information/Communications Div (6%): optical fiber cable, pure band, fusion splicer for FTTH applications, optical connector, optical data link, two-way communication device, access network system product (MegaBit Gear), Traffic control system, CATV system, river/road information system, power line communications, laser handy terminals;

Electronics Div (10%): printed circuit, flat component, compound semiconductor, gallium           nitride substrate, irradiated products, electric wire for electronic equipment & automobiles (ECO-WIRE), ultrafine copper wire & twisted wire, contact probe, porous metal (for batteries), polymide tube, fluororesin-coated products, others;

Electric Wire & Cables Div (21%): ecology cable, highly-fire resistant non-halogen cables for fire-fighting, high-voltage power cable, high-temperature superconducting cable, submarine power cable, trolley wire for high-speed railway, insulated wire for ultrasonic bonding, ultra-fine magnet wire, fiber-optic distributed temperature sensing system, infrared optical products, air spring, multi-beam lens antenna;

Industrial Materials Div (10%): cemented carbide insert, synthetic diamond, end mill & drill, microdrill, power metallurgical parts, composite materials for substrates & heat sinks (CMSH), bonding tool, steel wire for springs, epoxy-coated steel wire for prestressed concrete, steel cord;

Overseas Sales Ratios (55%)

 

Clients: [Automakers, telecommunications carriers] Toyota Motors, NTT Corp, Kansai Electric Power, Tokyo Electric Power, Sumitomo Corp, other.

No. of accounts: 1,000

Domestic areas of activities: Nationwide

Suppliers: [Mfrs, wholesalers] Sumitomo Corp, Metal One, Mitsui & Co, Sumitomo

Wiring Systems, Sumitomo Metal Mining Co, Sumitomo Chemical, other.

 

Payment record: Regular

 

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

 

 

Bank References:

SMBC (Osaka)

Sumitomo Trust Bank (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

　

2,568,779

2,159,942

　

  Cost of Sales

2,104,728

1,785,052

　

      GROSS PROFIT

464,051

374,890

　

  Selling & Adm Costs

343,993

298,100

　

      OPERATING PROFIT

120,058

76,790

　

  Non-Operating P/L

25,296

17,326

　

      RECURRING PROFIT

145,354

94,116

　

      NET PROFIT

66,748

37,955

BALANCE SHEET

　

　

  Cash

　

161,797

172,637

　

  Receivables

563,599

502,000

　

  Inventory

382,634

343,766

　

  Securities, Marketable

343

4,164

　

  Other Current Assets

95,246

93,194

　

      TOTAL CURRENT ASSETS

1,203,619

1,115,761

　

  Property & Equipment

724,877

651,051

　

  Intangibles

63,301

37,045

　

  Investments, Other Fixed Assets

563,022

493,710

　

      TOTAL ASSETS

2,554,819

2,297,567

　

  Payables

329,021

300,669

　

  Short-Term Bank Loans

215,379

167,961

　

　

　

　

　

  Other Current Liabs

196,046

188,524

　

      TOTAL CURRENT LIABS

740,446

657,154

　

  Debentures

46,230

56,850

　

  Long-Term Bank Loans

258,954

238,608

　

  Reserve for Retirement Allw

47,507

33,260

　

  Other Debts

　

81,770

67,000

　

      TOTAL LIABILITIES

1,174,907

1,052,872

　

      MINORITY INTERESTS

　

　

Common stock

99,737

99,737

　

Additional paid-in capital

171,020

171,020

　

Retained earnings

819,179

763,159

　

Evaluation p/l on investments/securities

85,170

66,687

　

Others

205,465

144,741

　

Treasury stock, at cost

(659)

(649)

　

      TOTAL S/HOLDERS` EQUITY

1,379,912

1,244,695

　

      TOTAL EQUITIES

2,554,819

2,297,567

CONSOLIDATED CASH FLOWS

　

　

Terms ending:

31/03/2014

31/03/2013

　

Cash Flows from Operating Activities

　

147,705

124,849

　

Cash Flows from Investment Activities

-174,102

-172,066

　

Cash Flows from Financing Activities

113

64,922

　

Cash, Bank Deposits at the Term End

　

160,129

176,543

ANALYTICAL RATIOS            Terms ending:

31/03/2014

31/03/2013

　

Net Worth (S/Holders' Equity)

1,379,912

1,244,695

　

Current Ratio (%)

162.55

169.79

　

Net Worth Ratio (%)

54.01

54.17

　

Recurring Profit Ratio (%)

5.66

4.36

　

Net Profit Ratio (%)

2.60

1.76

　

　

Return On Equity (%)

4.84

3.05

 

           

 

 

 

 

FOREIGN EXCHANGE RATES

 

Currency
Unit

Indian Rupees

US Dollar

1

Rs.61.25

UK Pound

1

Rs.98.68

Euro

1

Rs.77.60

 

 

INFORMATION DETAILS

 

Analysis Done by :

DIV

 

 

Report Prepared by :

TPT

 

 

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.