Sumitomo Metal Falls as Nikkei Slide Cuts Value of Holdings
Sumitomo Metal Industries Ltd. (5405), Japan’s third-largest steelmaker, fell to the lowest in three weeks in Tokyo trading after booking a 79.8 billion-yen ($1 billion) charge to write down the value of its stock investments.
The steelmaker declined 3.7 percent to 156 yen at the 3 p.m. close on the Tokyo Stock Exchange, the lowest since Sept. 12.
Japan’s benchmark Nikkei 225 Stock Average dropped 11 percent in the six months ended Sept. 30, with Sumitomo Metal’s biggest investment Nippon Steel Corp. (5401) down 16 percent. The charge will reduce Sumitomo Metal’s net income by 48 billion yen and net assets by 8 billion yen, the company said in a statement on Sept. 30.
Sumitomo Metal is currently examining its earnings forecasts for the first half and full year of fiscal 2011, ending on March 31, 2012, according to the statement. The steelmaker estimated in July that full-year profit will reach 50 billion yen, compared with a loss of 7.1 billion yen a year earlier.
Nippon Steel agreed to buy Sumitomo Metal for 726.5 billion yen, combining to become the world’s second-largest steelmaker.
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