SUMITOMO METAL MINING CO., LTD. Consolidated Financial Results for the Third Quarter Ended December 31, 2023 [IFRS]
February 8, 2024 | ||
[Full version of English translation released on March 4, 2024] | ||
Listed Company Name: Sumitomo Metal Mining Co., Ltd. | ||
Code: | 5713 | |
Listings: | Tokyo Stock Exchange | |
URL: | https://www.smm.co.jp/ | |
Representative: | Akira Nozaki, President and Representative Director | |
Contact: | Atsuyuki Inoue, Manager, PR & IR Dept. | TEL: +81-3-3436-7705 |
Scheduled Date to Submit Quarterly Report: February 13, 2024
Scheduled Date to Start Dividend Payment: -
Preparation of Supplementary Explanation Materials for Quarterly Financial Results: Yes
Briefing on Quarterly Account Settlement: Yes (for institutional investors and analysts)
(Amounts less than one million yen are rounded off)
1. Consolidated Financial Results (From April 1, 2023, to December 31, 2023)
- Consolidated Operating Results
(% figures show year-on-year change)
Net sales | Profit before tax | Profit | Profit attributable to | Total comprehensive | ||||||||||||
owners of parent | income | |||||||||||||||
Millions of | % | Millions of | % | Millions of | % | Millions of | % | Millions of | % | |||||||
yen | yen | yen | yen | yen | ||||||||||||
Nine months | ||||||||||||||||
ended | 1,085,039 | 0.9 | 87,359 | -60.0 | 60,841 | -62.2 | 58,326 | -61.8 | 226,297 | -34.5 | ||||||
December 31, | ||||||||||||||||
2023 | ||||||||||||||||
Nine months | ||||||||||||||||
ended | 1,075,684 | 16.6 | 218,630 | 11.9 | 160,848 | -11.1 | 152,783 | -10.2 | 345,612 | 43.6 | ||||||
December 31, | ||||||||||||||||
2022 | ||||||||||||||||
Basic earnings per share | Diluted earnings per share | |||||||||||||||
Yen | Yen | |||||||||||||||
Nine months ended | 212.28 | 212.28 | ||||||||||||||
December 31, 2023 | ||||||||||||||||
Nine months ended | 556.04 | 556.04 | ||||||||||||||
December 31, 2022 | ||||||||||||||||
- Consolidated Financial Position
Total assets | Total equity | Equity attributable to | Equity attributable to | |
owners of parent | owners of parent ratio | |||
Millions of yen | Millions of yen | Millions of yen | % | |
As of December 31, | 3,025,088 | 1,990,674 | 1,795,857 | 59.4 |
2023 | ||||
As of March 31, | 2,707,899 | 1,789,296 | 1,631,671 | 60.3 |
2023 | ||||
2. Dividends
Dividend per share | ||||||
First quarter-end | Second quarter-end | Third quarter-end | Year-end | Total | ||
Yen | Yen | Yen | Yen | Yen | ||
Year ended | - | 90.00 | - | 115.00 | 205.00 | |
March 31, 2023 | ||||||
Year ending | - | 35.00 | - | |||
March 31, 2024 | ||||||
Year ending March | 63.00 | 98.00 | ||||
31, 2024 (Forecast) | ||||||
(Note) Revision of dividend forecast that has been disclosed lastly: Yes |
3. Forecast of Consolidated Operating Results for the Year Ending March 31, 2024 (From April 1, 2023, to March 31, 2024)
(% figures show year-on-year change)
Net sales | Profit before tax | Profit | Profit attributable to | Basic earnings | ||||||
owners of parent | per share | |||||||||
Millions of yen | % | Millions of yen | % | Millions of yen | % | Millions of yen | % | Yen | ||
Full year | 1,417,000 | -0.4 | 77,000 | -66.5 | 48,000 | -71.8 | 46,000 | -71.4 | 167.42 | |
(Note) Revision of operating results forecast that has been disclosed lastly: Yes
For further details, please refer to "1. Qualitative Information on Quarterly Financial Results, (3) Forward- Looking Information Including Forecast of Consolidated Operating Results and Other" on page 5.
Notes
- Change in Important Subsidiaries during the Period under Review (Change in specific subsidiaries that will accompany a change in scope of consolidation): None
- Changes in Accounting Policies or Estimates
1) | Changes in accounting policies required by IFRS: | None |
2) | Changes in accounting policies other than item 1) above: | None |
3) | Changes in accounting estimates: | None |
- Number of Outstanding Shares (Common stock)
-
Number of shares issued as of end of period (including treasury stock) 290,814,015 shares at December 31, 2023
290,814,015 shares at March 31, 2023 - Number of shares of treasury stock as of end of period
-
Number of shares issued as of end of period (including treasury stock) 290,814,015 shares at December 31, 2023
16,052,644 shares at December 31, 2023
16,049,021 shares at March 31, 2023
3) Average number of shares during the period
274,762,796 shares for nine months ended December 31, 2023
274,767,570 shares for nine months ended December 31, 2022
The consolidated financial results presented herein are not subject to the quarterly review by certified public accountants or audit corporations.
Explanation regarding appropriate use of operating results forecast and other special notes(Caution Regarding Forward-Looking Statements)
The forecast of consolidated operating results for the year ending March 31, 2024, disclosed on November 8, 2023, has been revised in this report. The forward-looking statements, including business results forecast, contained in this report are based on information available to the Company and on certain assumptions deemed to be reasonable as of the date of release of this report and they are not meant to be a commitment by the Company. Also, actual business results may differ substantially due to a number of factors.
(Supplementary Explanation Materials for Quarterly Financial Results)
The Supplementary Explanation Materials will be posted on the Company's website on Thursday, February 8, 2024.
Contents of the Attachment | ||
1. Qualitative Information on Quarterly Financial Results | 2 | |
(1) | Business Performance | 2 |
(2) | Financial Position | 4 |
(3) | Forward-Looking Information Including Forecast of Consolidated Operating Results and Other | 5 |
2. Condensed Quarterly Consolidated Financial Statements and Primary Notes | 6 | |
(1) | Condensed Quarterly Consolidated Statement of Financial Position | 6 |
(2) | Condensed Quarterly Consolidated Statement of Profit or Loss and Consolidated Statement of | |
Comprehensive Income | 8 | |
(Condensed Quarterly Consolidated Statement of Profit or Loss) | 8 | |
(Condensed Quarterly Consolidated Statement of Comprehensive Income) | 9 | |
(3) | Condensed Quarterly Consolidated Statement of Changes in Equity | 10 |
(4) | Condensed Quarterly Consolidated Statement of Cash Flows | 12 |
(5) | Notes Relating to the Condensed Quarterly Consolidated Financial Statements | 14 |
(Note Relating to the Going Concern Assumption) | 14 | |
(Changes in Accounting Policies) | 14 | |
(Changes in Presentation Method) | 14 | |
(Operating Segments) | 14 | |
3. Supplementary Information | 16 |
1
1. Qualitative Information on Quarterly Financial Results
(1) Business Performance
(Millions of yen) | |||
Net sales | Profit before tax | Profit attributable to | |
owners of parent | |||
Nine months ended December 31, 2023 | 1,085,039 | 87,359 | 58,326 |
Nine months ended December 31, 2022 | 1,075,684 | 218,630 | 152,783 |
Increase/decrease | 9,355 | -131,271 | -94,457 |
[Rate of change: %] | [0.9] | [-60.0] | [-61.8] |
(Overseas market prices and foreign exchange rates)
Unit | Nine months ended | Nine months ended | Increase/decrease | |
December 31, 2022 | December 31, 2023 | |||
Copper | $/t | 8,425 | 8,334 | -91 |
Gold | $/TOZ | 1,777.0 | 1,961.2 | 184.2 |
Nickel | $/lb | 11.56 | 9.06 | -2.50 |
Exchange rate (TTM) | ¥/$ | 136.52 | 143.30 | 6.78 |
The global economy during the first nine months of fiscal 2023, the year ending March 31, 2024, saw a gradual slowdown. In the United States, despite the effects of a credit crunch born out of monetary tightening, the economy remained resilient with strong personal consumption. On the other hand, high prices and the prolonged monetary tightening weakened domestic demand in Europe and a downturn in the real estate market in China put downward pressure on economic growth.
As for exchange rates, while expectations were growing that the United States would shift its monetary policy to lowering of interest rates, there was also a broadening view that Japan's monetary easing policies would be amended to raising of interest rates, which temporarily led to the yen's appreciating trend. However, there was no major change in monetary policy for either country; therefore the yen continued to weaken, resulting in the average exchange rate for the yen that depreciated compared to the same period of the previous fiscal year.
Regarding the prices of major non-ferrous metals, copper prices were on a declining trend due mainly to concerns over declining demand caused by slowing growth in the economy of China and other countries, and the continued appreciation of the US dollar. However, prices then flattened out and average prices slightly declined year over year. Nickel prices decreased throughout the period due to factors including the slowdown in global economic growth, an increase in supply, and the appreciation of the US dollar, and average prices fell year over year. Gold prices, on the other hand, increased leading up to the end of the previous fiscal year due mainly to financial uncertainties from bank failures in Europe and the United States. Although prices then turned to a declining trend due to reasons such as the successive interest rate hikes in the United States, the rise of geopolitical tensions in the Middle East resulted in an increase in average prices year over year.
In industries related to the Materials business, the market for electric vehicles grew robustly, and demand for automobile battery materials remained strong. On the other hand, some markets, including the automobile market, saw a recovery due to the end of semiconductor shortages; however, the sluggish economic recovery in China and stagnant shipments of smartphones and computers have led to continued inventory adjustments of electronic parts, preventing a full-scale recovery in demand for components for electronic parts.
Under these circumstances, consolidated net sales in the first nine months of fiscal 2023 increased by ¥9,355 million year over year to ¥1,085,039 million, due mainly to increased sales of automobile battery materials.
Consolidated profit before tax decreased by ¥131,271 million year over year to ¥87,359 million, due mainly to a decline in copper and nickel prices and a decrease in temporary positive factors such as foreign exchange gain resulting from the rapid depreciation of the yen in the same period of the previous fiscal year.
Profit attributable to owners of parent decreased by ¥94,457 million year over year to ¥58,326 million, due mainly to a decrease in consolidated profit before tax.
2
Operating results by reportable segment are as follows.
(Segment income is calculated based on profit before tax in the condensed quarterly consolidated statement of profit or loss.)
(Mineral Resources segment) | (Millions of yen) | ||||
Nine months ended | Nine months ended | Increase/decrease | Rate of change (%) | ||
December 31, 2022 | December 31, 2023 | ||||
Net sales | 126,533 | 118,936 | -7,597 | -6.0 | |
Segment income | 57,133 | 44,955 | -12,178 | -21.3 | |
Segment income decreased year over year due to the decrease in copper prices and the increase in production costs stemming mainly from global inflation.
The statuses of the main mines are as follows.
Mining operations at the Hishikari Mine remained steady in line with the planned annual sales volume of 4.0 tonnes, and the sales volume of gold in the first nine months of fiscal 2023 was 2.9 tonnes.
Production levels at the Morenci Copper Mine (United States) (of which the Company holds a 25.0% interest, excluding non-controlling interest) was 274 thousand tonnes, lower than the same period of the previous fiscal year due mainly to a decline in mining volume.
Production levels at the Cerro Verde Copper Mine (Peru) (of which the Company holds a 16.8% interest, excluding non-controlling interest) rose from the same period of the previous fiscal year to 343 thousand tonnes, due mainly to an increase in ore grade and an increase in the amount handled.
(Smelting & Refining segment) | (Millions of yen) | ||||||||
Nine months ended | Nine months ended | Increase/decrease | Rate of change (%) | ||||||
December 31, 2022 | December 31, 2023 | ||||||||
Net sales | 810,480 | 790,659 | -19,821 | -2.4 | |||||
Segment income | 118,024 | 43,208 | -74,816 | -63.4 | |||||
(Output by the Company's major product) | |||||||||
Product | Unit | Nine months ended | Nine months ended | Increase/decrease | |||||
December 31, 2022 | December 31, 2023 | ||||||||
Copper | t | 335,668 | 269,900 | -65,768 | |||||
Gold | kg | 13,785 | 13,157 | -628 | |||||
Electrolytic nickel | t | 37,394 | 42,580 | 5,186 | |||||
Ferronickel | t | 7,869 | 4,166 | -3,703 |
(Note) Output includes the portions of commissioning and/or commissioned production.
Segment income decreased year over year, due mainly to the decline in nickel prices and the decrease in temporary positive factors, which occurred in the same period of the previous fiscal year due to the rapid depreciation of the yen.
Although the production level and sales volume of electrolytic nickel increased from the same period of the previous fiscal year, the production level of electrolytic copper decreased from the same period of the previous fiscal year due to the scheduled renovations (large-scale scheduled shutdown) at Toyo Smelter
-
Refinery, while sales volume also decreased year over year. The production level of ferronickel also decreased year over year.
Production levels of Coral Bay Nickel Corporation (Philippines) decreased year over year due mainly to equipment trouble. Operations at Taganito HPAL Nickel Corporation (Philippines) generally continued as planned, with production levels remaining on par with the same period of the previous fiscal year.
3
(Materials segment) | (Millions of yen) | ||||
Nine months ended | Nine months ended | Increase/decrease | Rate of change (%) | ||
December 31, 2022 | December 31, 2023 | ||||
Net sales | 241,577 | 263,129 | 21,552 | 8.9 | |
Segment income | 20,274 | 1,398 | -18,876 | -93.1 | |
Segment income decreased year over year, due mainly to the impact of falling prices of non-ferrous metals, which pushed down profits, and sluggish demand for components for electronic parts, despite higher sales of automobile battery materials.
(2) Financial Position | ||||
1) Financial Position | (Millions of yen) | |||
As of March 31, 2023 | As of December 31, 2023 | Increase/decrease | ||
Total assets | 2,707,899 | 3,025,088 | 317,189 | |
Total liabilities | 918,603 | 1,034,414 | 115,811 | |
Total equity | 1,789,296 | 1,990,674 | 201,378 |
Total assets as of December 31, 2023 increased from those as of March 31, 2023. Although inventories decreased, property, plant and equipment, investments accounted for using equity method, and other financial assets under non-current assets, mainly investment securities and long-term loans receivable, increased.
Total liabilities as of December 31, 2023 increased from those as of March 31, 2023. Although bonds and borrowings, and income taxes payable under current liabilities decreased, bonds and borrowings, and deferred tax liabilities under non-current liabilities increased.
Total equity as of December 31, 2023 increased from that as of March 31, 2023. Under other components of equity, the exchange differences on transition of foreign operations increased due to the depreciation of the yen, and financial assets measured at fair value through other comprehensive income increased due to an increase in the price of stock holdings.
2) Cash Flows | (Millions of yen) | |||
Nine months ended | Nine months ended | Increase/decrease | ||
December 31, 2022 | December 31, 2023 | |||
Net cash provided by operating | 74,838 | 204,954 | 130,116 | |
activities | ||||
Net cash used in investing | (85,589) | (215,672) | -130,083 | |
activities | ||||
Net cash provided by (used in) | (18,081) | 54,136 | 72,217 | |
financing activities | ||||
Effect of exchange rate changes | 24,733 | 16,059 | -8,674 | |
on cash and cash equivalents | ||||
Cash and cash equivalents at | 213,977 | 215,007 | 1,030 | |
beginning of period | ||||
Cash and cash equivalents at end | 209,878 | 274,484 | 64,606 | |
of period | ||||
Net cash provided by operating activities during the first nine months of fiscal 2023 increased from the same period of the previous fiscal year, due mainly to decreases in inventories and trade and other receivables, despite decreases in profit before tax and trade and other payables.
Net cash used in investing activities increased from the same period of the previous fiscal year, due mainly to a decrease in proceeds from withdrawal of time deposits and increases in payments for long-term loans receivable and purchase of property, plant and equipment.
Net cash provided by financing activities was posted during the first nine months of fiscal 2023, despite the recording of net cash used in the same period of the previous fiscal year. This was due mainly to increases in proceeds from long-term borrowings and proceeds from short-term borrowings, despite an increase in repayments of short-term borrowings compared to the same period of the previous fiscal year.
4
(3) Forward-Looking Information Including Forecast of Consolidated Operating Results and Other
(Millions of yen)
Profit | ||||
Net sales | Profit before tax | Profit | attributable to | |
owners of | ||||
parent | ||||
Year ending March 31, 2024 (Forecast) | 1,417,000 | 77,000 | 48,000 | 46,000 |
Year ended March 31, 2023 (Results) | 1,422,989 | 229,910 | 170,441 | 160,585 |
Increase/decrease | -5,989 | -152,910 | -122,441 | -114,585 |
[Rate of change: %] | [-0.4] | [-66.5] | [-71.8] | [-71.4] |
(Overseas market prices and foreign exchange rates)
A | B | (A+B/2) | ||
FY2023 | FY2023 | FY2023 Forecast | ||
Unit | First Nine Months | Fourth Quarter | (April 1, 2023 | |
Results | Forecast | to March 31, 2024) | ||
Copper | $/t | 8,334 | 8,300 | 8,326 |
Gold | $/TOZ | 1,961.2 | 1,950.0 | 1,958.4 |
Nickel | $/lb | 9.06 | 7.50 | 8.67 |
Exchange rate | ¥/$ | 143.30 | 140.00 | 142.48 |
(TTM) | ||||
In the business environment surrounding the SMM Group, in the non-ferrous metals industry, while there were concerns over the supply of copper because of the cessation of operations at a large-scale copper mine in Panama, given factors such as concerns about the slowing growth in the economy of China and other countries and the expected increase in supply capacity, we anticipate the supply-demand balance for both copper and nickel to remain slightly in oversupply over the near term.
As for industries related to the Materials business, robust demand is expected for automobile battery materials, backed by the progress of electrification of automobiles. On the other hand, components for electronic parts have shown signs of a recovery in demand in related markets; however, a full-fledged recovery is not expected until the next fiscal year or beyond.
The forecast of consolidated operating results for fiscal 2023 has been revised from the previous forecast (announced on November 8, 2023), revising our estimate for major non-ferrous metals prices by predicting the future supply-demand balance with consideration given to the current level, as well as our forecast for foreign exchange rates in consideration of the trend of the first nine months of fiscal 2023. Our forecast for production levels and sales volumes of major products has been revised based on current results. As a result, net sales are expected to reach ¥1,417.0 billion, profit before tax of ¥77.0 billion, profit of ¥48.0 billion, and profit attributable to owners of parent of ¥46.0 billion on a consolidated basis.
Forecast of consolidated operating results for fiscal 2023 (Revised)
(Millions of yen)
Mineral | Smelting & | Materials | Total | Other | Adjustments | Total | |
Resources | Refining | Businesses | |||||
Net sales | 165,000 | 1,035,000 | 338,000 | 1,538,000 | 10,000 | (131,000) | 1,417,000 |
Segment | 56,000 | 39,000 | (5,000) | 90,000 | (2,000) | (11,000) | 77,000 |
income | |||||||
Reference: Forecast of consolidated operating results for fiscal 2023 (Figures announced on November 8)
(Millions of yen)
Mineral | Smelting & | Materials | Total | Other | Adjustments | Total | |
Resources | Refining | Businesses | |||||
Net sales | 164,000 | 1,044,000 | 341,000 | 1,549,000 | 10,000 | (129,000) | 1,430,000 |
Segment | 59,000 | 38,000 | (4,000) | 93,000 | (3,000) | (4,000) | 86,000 |
income | |||||||
5
2. Condensed Quarterly Consolidated Financial Statements and Primary Notes
(1) Condensed Quarterly Consolidated Statement of Financial Position
FY2022 | Third Quarter of FY2023 | ||
(As of March 31, 2023) | (As of December 31, 2023) | ||
Millions of yen | Millions of yen | ||
Assets | |||
Current assets | |||
Cash and cash equivalents | 215,007 | 274,484 | |
Trade and other receivables | 189,199 | 173,560 | |
Other financial assets | 6,273 | 14,408 | |
Inventories | 555,941 | 481,303 | |
Other current assets | 56,423 | 50,993 | |
Subtotal | 1,022,843 | 994,748 | |
Assets held for sale | － | 700 | |
Total current assets | 1,022,843 | 995,448 | |
Non-current assets | |||
Property, plant and equipment | 629,451 | 734,012 | |
Intangible assets and goodwill | 68,217 | 75,960 | |
Investment property | 3,477 | 3,477 | |
Investments accounted for using equity method | 450,512 | 519,907 | |
Other financial assets | 497,496 | 659,188 | |
Deferred tax assets | 1,822 | 1,814 | |
Other non-current assets | 34,081 | 35,282 | |
Total non-current assets | 1,685,056 | 2,029,640 | |
Total assets | 2,707,899 | 3,025,088 | |
6
FY2022 | Third Quarter of FY2023 | ||
(As of March 31, 2023) | (As of December 31, 2023) | ||
Liabilities and equity | Millions of yen | Millions of yen | |
Liabilities | |||
Current liabilities | |||
Trade and other payables | 251,696 | 244,909 | |
Bonds and borrowings | 158,409 | 146,228 | |
Other financial liabilities | 10,337 | 14,261 | |
Income taxes payable | 24,968 | 13,121 | |
Provisions | 8,663 | 5,752 | |
Other current liabilities | 17,190 | 24,057 | |
Total current liabilities | 471,263 | 448,328 | |
Non-current liabilities | |||
Bonds and borrowings | 298,848 | 416,260 | |
Other financial liabilities | 8,816 | 8,594 | |
Provisions | 40,361 | 45,530 | |
Retirement benefit liability | 4,396 | 5,355 | |
Deferred tax liabilities | 94,041 | 107,087 | |
Other non-current liabilities | 878 | 3,260 | |
Total non-current liabilities | 447,340 | 586,086 | |
Total liabilities | 918,603 | 1,034,414 | |
Equity | |||
Share capital | 93,242 | 93,242 | |
Capital surplus | 89,800 | 89,800 | |
Treasury shares | (38,076) | (38,092) | |
Other components of equity | 220,383 | 364,310 | |
Retained earnings | 1,266,322 | 1,286,597 | |
Total equity attributable to owners of parent | 1,631,671 | 1,795,857 | |
Non-controlling interests | 157,625 | 194,817 | |
Total equity | 1,789,296 | 1,990,674 | |
Total liabilities and equity | 2,707,899 | 3,025,088 | |
7
- Condensed Quarterly Consolidated Statement of Profit or Loss and Consolidated Statement of Comprehensive Income
(Condensed Quarterly Consolidated Statement of Profit or Loss)
Nine months | Nine months | ||
ended December 31, 2022 | ended December 31, 2023 | ||
(From April 1, 2022 | (From April 1, 2023 | ||
to December 31, 2022) | to December 31, 2023) | ||
Millions of yen | Millions of yen | ||
Net sales | 1,075,684 | 1,085,039 | |
Cost of sales | (849,512) | (963,666) | |
Gross profit | 226,172 | 121,373 | |
Selling, general and administrative expenses | (46,354) | (50,015) | |
Finance income | 27,247 | 10,083 | |
Finance costs | (6,452) | (11,544) | |
Share of profit (loss) of investments accounted for using | 24,792 | 31,484 | |
equity method | |||
Other income | 2,917 | 1,904 | |
Other expenses | (9,692) | (15,926) | |
Profit before tax | 218,630 | 87,359 | |
Income tax expense | (57,782) | (26,518) | |
Profit | 160,848 | 60,841 | |
Profit attributable to: | |||
Owners of parent | 152,783 | 58,326 | |
Non-controlling interests | 8,065 | 2,515 | |
Profit | 160,848 | 60,841 | |
Earnings per share | |||
Basic earnings per share (Yen) | 556.04 | 212.28 | |
Diluted earnings per share (Yen) | 556.04 | 212.28 |
8
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Sumitomo Metal Mining Co. Ltd. published this content on 04 March 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 04 March 2024 10:56:06 UTC.
