MIRA INFORM REPORT

 

 

Report No. :

339347

Report Date :

04.09.2015

 

IDENTIFICATION DETAILS

 

Name :

SUMITOMO ELECTRIC INDUSTRIES LTD

 

 

Registered Office :

4-5-33 Kitahama Chuoku Osaka 541-0041

 

 

Country :

Japan

 

 

Financials (as on) :

31.03.2015

 

 

Date of Incorporation :

August, 1911

 

 

Com. Reg. No.:

1200-01-077450 (Osaka-Chuoku)

 

 

Legal Form :

Limited Company (Kabushiki Kaisha)

 

 

Line of Business :

Manufacturer of Electric Wires & Cables.

 

 

No. of Employees :

240,798

 

 

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 :

Excellent

 

 

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 – March 31, 2015

 

Country Name

Previous Rating

(31.12.2014)

Current Rating

(31.03.2015)

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 an 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. Scarce in many natural resources, Japan has long been dependent on imported raw materials. Since the complete shutdown of Japan’s nuclear reactors after the earthquake and tsunami disaster in 2011, Japan's industrial sector has become even more dependent than it was previously on imported fossil 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 impressive - 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 aftereffects 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 four times since 2008. 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 of that year disrupted manufacturing. The economy has largely recovered in the four years since the disaster, although reconstruction in the affected Tohoku region has lagged, in part due to a shortage of labor in the construction sector. Japan enjoyed a sharp uptick in growth in 2013 on the basis of Prime Minister Shinzo Abe’s “Three Arrows” economic revitalization agenda - dubbed “Abenomics” - of monetary easing, “flexible” fiscal policy, and structural reform. Abe’s government has replaced the preceding administration’s plan to phase out nuclear power with a new policy of seeking to restart nuclear power plants that meet strict new safety standards, and emphasizing nuclear energy’s importance as a base-load electricity source. Japan joined the Trans-Pacific Partnership (TPP) 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 2014 stood as the fourth-largest economy in the world after first-place China, which surpassed Japan in 2001, and third-place India, which edged out Japan in 2012. While seeking to stimulate and reform the economy, the government must also devise a strategy for reining in Japan's huge government debt, which amounts to more than 230% of GDP. To help raise government revenue, Japan adopted legislation in 2012 to gradually raise the consumption tax rate to 10% by 2015, beginning with a hike from 5% to 8% implemented in April 2014. That increase had a contractionary effect on GDP, however, so PM Abe in late 2014 decided to postpone the final phase of the increase until April 2017 to give the economy more time to recover. Led by the Bank of Japan’s aggressive monetary easing, Japan is making progress in ending deflation, but demographics - low birthrate and an aging, shrinking population - pose major long-term challenges for the economy.

 

Source : CIA

 

Company Name and 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 2,822,811 M

PAYMENTS      REGULAR         CAPITAL                       Yen 99,737 M

TREND UP                    WORTH                        Yen 1,646,913 M

STARTED         1911                 EMPLOYES                  240,798

 

 

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 31/03/2016 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. The firm is a pioneer in superconducting power cables and has engaged in demonstration experiment in Japan and the US. 

           

 

FINANCIAL INFORMATION

 

The sales volume for Mar/2015 fiscal term amounted to Yen 2,822,811 million, a 9.9% up from Yen 2,568,779 million in the previous term.  Wire harnesses and hard metals lead sales & profits.  Export profitability of the optical fiber-related business took an upturn thanks to a lower Yen.  The recurring profit was posted at Yen 160,597 million and the net profit at Yen 119,771 million, respectively, compared with Yen 145,354 million recurring profit and Yen 66,748 million net profit, respectively, a year ago 

 

For the current term ending Mar 2016 the recurring profit is projected at Yen 175,000 million and the net profit at Yen 90,000 million, on an 8.0% rise in turnover, to Yen 3,050,000 million.  Sales of automobile-related products, including anti-vibration rubbers, will continue growth. 

 

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 (%): Japan Trustee Services T (5.4), Master Trust Bank of Japan T (5.3), Nippon Life Ins (3.1), Sumitomo Life Ins (1.9), Japan Trustee Services T9 (1.6), SMBC (1.5), Bank of New York Mellon SANV 10 (1.5), CBNY Government of Norway (1.4), State Street Bank & Trust 505001 (1.3), State Street Bank West Treaty (1.2); foreign owners (42.9)

           

No. of shareholders: 60,168

 

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; 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 (22%): 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 (88%)

 

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:

31/03/2015

31/03/2014

INCOME STATEMENT

　

　

  Annual Sales

　

2,822,811

2,568,779

　

  Cost of Sales

2,310,606

2,104,728

　

      GROSS PROFIT

512,205

464,051

　

  Selling & Adm Costs

377,748

343,993

　

      OPERATING PROFIT

134,457

120,058

　

  Non-Operating P/L

26,140

25,296

　

      RECURRING PROFIT

160,597

145,354

　

      NET PROFIT

119,771

66,748

BALANCE SHEET

　

　

  Cash

　

172,697

161,797

　

  Receivables

644,834

563,599

　

  Inventory

450,276

382,634

　

  Securities, Marketable

5,009

343

　

  Other Current Assets

142,745

95,246

　

      TOTAL CURRENT ASSETS

1,415,561

1,203,619

　

  Property & Equipment

789,775

724,877

　

  Intangibles

67,232

63,301

　

  Investments, Other Fixed Assets

653,217

563,022

　

      TOTAL ASSETS

2,925,785

2,554,819

　

  Payables

367,253

329,021

　

  Short-Term Bank Loans

213,637

215,379

　

　

　

　

　

  Other Current Liabs

228,979

196,046

　

      TOTAL CURRENT LIABS

809,869

740,446

　

  Debentures

35,610

46,230

　

  Long-Term Bank Loans

288,160

258,954

　

  Reserve for Retirement Allw

39,408

47,507

　

  Other Debts

　

105,825

81,770

　

      TOTAL LIABILITIES

1,278,872

1,174,907

　

      MINORITY INTERESTS

　

　

Common stock

99,737

99,737

　

Additional paid-in capital

171,020

171,020

　

Retained earnings

920,850

819,179

　

Evaluation p/l on investments/securities

127,416

85,170

　

Others

328,557

205,465

　

Treasury stock, at cost

(667)

(659)

　

      TOTAL S/HOLDERS` EQUITY

1,646,913

1,379,912

　

      TOTAL EQUITIES

2,925,785

2,554,819

CONSOLIDATED CASH FLOWS

　

　

Terms ending:

31/03/2015

31/03/2014

　

Cash Flows from Operating Activities

　

153,509

147,705

　

Cash Flows from Investment Activities

-86,888

-174,102

　

Cash Flows from Financing Activities

-64,037

113

　

Cash, Bank Deposits at the Term End

　

177,107

160,129

ANALYTICAL RATIOS            Terms ending:

31/03/2015

31/03/2014

　

Net Worth (S/Holders' Equity)

1,646,913

1,379,912

　

Current Ratio (%)

174.79

162.55

　

Net Worth Ratio (%)

56.29

54.01

　

Recurring Profit Ratio (%)

5.69

5.66

　

Net Profit Ratio (%)

4.24

2.60

　

　

Return On Equity (%)

7.27

4.84

 

FOREIGN EXCHANGE RATES

 

Currency
Unit

Indian Rupees

US Dollar

1

Rs.66.23

UK Pound

1

Rs.101.22

Euro

1

Rs.74.33

 

INFORMATION DETAILS

 

Analysis Done by :

TRI

 

 

Report Prepared by :

ASH

 

 

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%)

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