Sumitomo posts 27% fall in profits on high costs

09 May 2008 09:02 [Source: ICIS news]

TOKYO (ICIS news)--Sumitomo Chemical has posted a 26.7% decline in its full-year operating income due to rising feedstock costs, the Japanese chemicals firm said on Friday.

Consolidated operating income for the period ending 31 March was yen (Y) 102.4bn ($992.5m), from Y139.6bn the previous year, it said, adding net sales increased 6% to 1,896.5bn, from Y1,790bn year on year, while net income decreased 32.8% to Y63.1bn, from Y93.9bn.

In the company’s basic chemicals segment, sales of caprolactam and acrylonitrile, raw materials for synthetic textile fibres as well as methyl methacrylate increased, owing to firm demand and improved prices reflecting high feedstock costs, Sumitomo said.

But due to the rising raw materials costs and capital expenditure, the segment posts a 21.5% fall in full-year operating income to Y10.6bn, while net sales rose 0.2% to Y314.7bn, it said.

In Sumitomo’s petrochemicals and plastics segment, its full-year operating income fell 80.9% year on year to Y4.5bn, while net sales increased 11.9% to Y603.3bn.

Sales of synthetic resins increased on the back of higher prices in Asian markets and increases in selling prices in Japan, made in response to the rising cost of feedstocks, the company said.

($1 = Y104.04)

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By: Tomomi Yokomura
+65 6780 4359

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