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Greetings from the President
We are very grateful for your continuous support of the business activities of Sumitomo Metal Mining Co., Ltd.
Business Climate in FY2009 and Response
Thanks in part to the effects of governmental policies of countries around the world, the global economy in FY2009 has escaped from the vicious circle caused by the financial crisis originating in the United States and the deterioration of the real economy. In the second half of the year, the economy began to gradually recover. The Japanese economy suffered in the midst of generally harsh conditions including no signs of improvement in the employment situation or capital investment. However, as the result of the recovery of exports – mainly those directed to Asian countries – the Japanese economy also began to gradually recover. In the latter half of the year, the price of non-ferrous metals, which substantially affect Sumitomo Metal Mining’s business performance, had almost completely recovered to the level achieved before the sudden decline suffered in the prior year.
In the midst of this business climate, Sumitomo Metal Mining strove toward further boosting corporate value by promoting growth strategies based on the 2006 3-Year Business Plan that was implemented starting in 2007. The implementation of emergency responses to sharp fluctuations in the business climate was also continued from the previous year.
Business Results for FY2009
In FY2009, consolidated sales decreased approximately 9% year-on-year to 725.8 billion yen, due to factors including the remaining impact of last year’s decrease in price of nonferrous metals on copper and nickel. Consolidated operating income rose dramatically from last year to 66.3 billion yen, as a result of the expansion of contributions from overseas business projects, improvement and cost decrease in the electronics and advanced materials division, and inventory valuation in the midst of a recovery trend among nonferrous metals. Consolidated ordinary profits also increased approximately 170% year-on-year to 87.8 billion yen.
Outlook for FY2010
The global economy is currently on an overall gradual trend toward improvement due to the recovery of developing nations, including China. In FY2010, strong demand and metal prices at the same level as those of FY2009 are forecasted for the mineral resources business and smelting business. In addition, the materials business is predicted to improve compared to last year since the upswing in demand can be expected to continue.
Given these circumstances, the SMM Group will be implementing the 2009 3-Year Business Plan announced in February 2009 that will span the three-year period from FY2010 to FY2012. The SMM Group will be promoting a new long-term, vision-oriented growth strategy based on realigned business structure, and will seek the further improvement of corporate value.
Sumitomo Metal Mining’s growth to date has in no way been underpinned solely by the business climate; it has also been built up by the efforts made by its employees and the cooperation of its shareholders and other stakeholders. The SMM Group will continue to make utmost efforts in expediting its growth strategy as it has in the past, in consideration of the economic conditions and the business climate. Based on our motto, "deeds, not words," we will fulfill our objectives in an effort to further boost our enterprise value.
We will also be mindful of executing management so that we can win confidence and attain stable growth. We intend to proactively distribute information on projects as well as new products and technologies to familiarize shareholders more deeply with SMM.
We look forward to your continued support and understanding in regard to our activities.
President & Representative Director
