Sumitomo Metal Industries Limited has revised its first half consolidated financial forecast (from April 1st 2012 to September 30th 2012) of the current fiscal year ending March 31st 2013, which was announced on July 30th 2012. This was based on the decision by the Board of Directors on August 30th 2012 to recognize impairment loss as extraordinary loss.
1. Impairment loss
Pursuant to the Accounting Standards for Impairment of Fixed Assets, Sumitomo Metals has recognized signs of impairment loss in certain fixed assets held by Sumikin Iron & Steel Corp. related to lower profitability resulting from the deteriorated business environment. In consideration of recoverability of those assets, Sumitomo Metals expects to recognize an impairment loss of approximately JPY 120 billion as an extraordinary loss in its first six-month consolidated financial forecast of FY 2012.
| Location | Application | Asset type | Impairment amount |
| Wakayama Prefecture | Manufacturing facilities | Machinery equipment, etc. | Approximately JPY 120 billion |
Sumikin Iron & Steel Corporation will continue to operate as a manufacturing base as it expects to keep generating cash flow in the future. It also aims to improve cost to enhance competitiveness to improve profitability, ensure stable supply of steel materials, and provide stable employment together with subcontracting companies, and contribute to the local economy where it has production and related facilities.
2. Revision of financial forecasts
Revised financial forecasts for the first six month of FY 2012 (from April 1st 2012 to September 30th 2012)
| Net sales | Operating income | Ordinary income | Net income | Net income per share | |
| Previous forecasts | 720,000 | 13,000 | 10,000 | -8,000 | -1.73 |
| Revised forecasts | 720,000 | 13,000 | 10,000 | -128,000 | -27.61 |
| Difference | 0 | 0 | 0 | -120,000 | |
| Rate of change (%) | 0 | 0 | 0 | � | |
| (Reference) H1 2011 | 692,215 | 41,268 | 41,370 | -32,387 | -6.99 |
In JPY million
Source - Sumitomo Metal Industries Limited
(www.steelguru.com)
