SEI to Regain Operating Profit in 2Q and Narrow Loss in 1Q

Sumitomo Electric Industries (SEI) is expected to regain consolidated operating profit for July-September 2009 though the firm was suffered from 14.7-billion-yen operating loss for April-June 2009, explained Masayoshi Matsumoto, SEI’s president, at a private interview with Japan Metal Bulletin. SEI seems to have posted operating profit at more than 3 billion yen in July.

The half-year result may remarkably improve from originally estimated 30-billion-yen operating loss for April-September 2009. SEI succeeded in profit improvement by lowering breakeven point through labor downsizing and productive optimization.

SEI estimated consolidated net sales of 1.78 trillion yen and consolidated operating profit of 15 billion yen for a full fiscal year ending in March 2010. Mr. Matsumoto explained order receipts for SEI’s main products currently stays at year-to-year 70% level. He said cemented carbide tool and magnet wire businesses are still in red. Meanwhile, other major items returned into black in June-July.

The automotive business unit turned into black in June. Global demand for automotive parts gradually recovered and cost cut efforts contributed to the profit recovery, including labor downsizing for the automotive wiring harness business by approximately 20,000 employees worldwide. The business unit posted net sales at 154.4 billion yen and operating loss at 8.6 billion yen for April-June 2009.