SUMIDA: Investor News

Notice of Posting Extraordinary Loss for 2Q 2013, Reversal of Deferred Tax Assets and Revising Full-Year Earnings Forecast

July 31st 2013 Press Release

  1. Extraordinary loss
    As previously informed in two press releases on June 5th & 19th, SUMIDA AG, a consolidated subsidiary in Germany that had suffered from the damages caused by the floods in central Europe has resumed production almost at normal levels. As for the damages from the floods, extraordinary loss of 438 million yen was posted for the second quarter of 2013, breakdowns of which were fixed costs during a period of suspended operations, loss of machinery and inventory, and etc. Though these losses were insured, amount of insurance proceeds is not
    known yet.
  2. Reversal of deferred tax and revision of full-year earnings forecast
    Taking our recent performances into consideration, we have revised as follows earnings forecast for fiscal 2013 (from January 1, 2013 through December 31, 2013) that had been disclosed together with the financial statements for fiscal 2012 ending December 31, 2012.
    1. Revision of earnings forecast for fiscal 2013
      Million yen
        Sales  Operating
      Net Income  Net Income / share
      Before revision (A) 62,300  2,300 1,770  500  21.54
      After revision (B) 63,700  1,300 800 △2,200 △94.78
      Change(B-A) 1,400 △1,000 △970  △2,700 -
      Change (%) 2.2%  △43.5% △54.8% - -
      Fiscal 2012
      51,300  1,754 1,148 725  36.00
      Assumption of foreign exchange rates:
         (A) 90 yen to the dollar & 120 yen to euro
         (B) 101 yen to the dollar & 131 yen to euro
    2. Reasons for revision
      With yen being weaker than previously assumed, sales have been revised upward. In addition to having failed to achieve the plan in local currencies basis in the first half of this year with damages by the floods in Germany and other factors, operating income has been revised down as production costs are expected to rise due to yen’s continuous depreciation against the dollar.

      As well as accelerating again growth strategies for the mid-term business plan, we will aim to save approximately 1 billion yen costs and expenses next year by eliminating and merging offices and factories and carrying out restructuring in the second half of this year aiming to optimize group-wide manufacturing and R&D functions.

      On the other hand, revising 2013 earnings forecast, recoverability of deferred tax assets has been reviewed according to the revised forecast (B) based on conservative accounting principle. As a result, a part of deferred tax assets has been reversed and debited as corporate income tax expenses (1,570 million yen) in the second quarter of 2013. However, as this accounting treatment is involved with no cash out, Sumida group’s cash-flow will be in no way affected.

      At this moment, dividend payment schedule for fiscal 2013 remains unchanged.

      [Reference Information] Million Yen
      Cost Savings Effective From 2014
        1st Half 2nd Half (est.) Total (est.)
      Flood Damages  △ 438  558 120   -
      Elimination / Consolidation
         Offices & Factories
      △ 150
      △ 150
      Restructuring Exp.  -  △ 280  △ 280  300
      Others  △ 4  △ 85  △ 90   -
      Total Extraordinary Exp.  △ 443  43  △ 400   600
      SGA Exp.        350

(Notes to earnings forecast)

Earnings forecast posted in this release is based on information available at hand and a certain number of reasonable assumptions, but we do not intend to promise to achieve it. The actual performance may significantly vary depending on various factors.


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