Impairment risk in the resource and steel pipe businesses comes to the fore amid weak resource prices
First written in FY2016. 8 of 29 entries say "Materialised", first in FY2016. Latest entry: FY2026.
Sumitomo Corporation (Sumitomo Shoji Kaisha,Ltd.) moved to the "Worse" side of this theme in 2019.
1 other company's latest entry also says "Worsened".
- FY2026WorsenedAnnual report
「• Australian coal business: Profit declined due to lower prices and lower sales volumes of coking coal • South African iron ore business: Lower prices • Copper business: Profit increased due to higher prices and other factors」
Resource-price fluctuations continued to be reflected in results during the current fiscal year. Profit declined in the Australian coal and South African iron ore businesses due to lower prices and other factors, while profit increased in the copper business due to higher prices and other factors, showing differing impacts by commodity. - FY2026-H1WorsenedAnnual report
「• Australian coal business: Profit declined due to lower prices and lower sales volumes of coking coal • South African iron ore business: Lower prices • Copper business: Profit increased due to higher prices and other factors」
In the resource segment for the six-month consolidated period, profit declined in the Australian coal and South African iron ore businesses due to lower prices and other factors, while profit increased in the copper business due to higher prices and other factors. The impact of resource-price fluctuations continued to be reflected in results. - FY2024MaterialisedAnnual report
「In the Madagascar nickel business, the production outlook was revised downward based on current operating conditions, including problems with plant equipment, and the business plan was revised accordingly. As a result of recognizing impairment losses on the fixed assets held by the Project Companies down to their recoverable amount based on the revised business plan, the Resources and Chemicals segment recognized impairment losses of ¥75,462 million on the Group's investments and loans.」
The risks associated with resource prices and operating conditions materialized as a downward revision to the production outlook for the Madagascar nickel business and an impairment loss of ¥75.462 billion. - FY2024-Q3RestatedAnnual report
「• Decline in resource and energy prices」
The decline in resource and energy prices continues to be cited as a factor reducing profit in the Resources and Chemicals segment. There was no material change in the risk disclosure from the previous quarter. - FY2024-Q2WorsenedAnnual report
「• Decline in resource and energy prices」
The decline in resource and energy prices was cited as a main factor behind the year-on-year decrease in profit in the Resources and Chemicals segment. Downward pressure on the resource-price environment had emerged from the previously high levels. - FY2023-Q2RestatedAnnual report
「International commodity markets remain elevated, with prices for many commodities, particularly fossil fuels, having surged and continuing to stay high.」
The disclosure stated that resource prices continued to be elevated and remained high, rather than languishing. Disclosure of the risk of fluctuations in resource prices itself continued. quantified is false, materialized is false. - FY2023-Q1RestatedAnnual report
「International commodity markets remain elevated, with prices for many commodities, particularly fossil fuels, having surged and continuing to stay high.」
The explanation stated that commodity prices, particularly fossil fuels, had surged and remained high, rather than resource prices being weak. In substance, the resource-price environment had not changed from the previous fiscal year. - FY2022MitigatedAnnual report
「During the consolidated fiscal year, impairment testing was performed because indications of impairment were identified for the Project Companies' fixed assets at the end of the first and third quarters. However, no impairment loss was recognized because the fair value less costs of disposal of the fixed assets exceeded their carrying amount.」
The Madagascar nickel business continued to show indications of impairment during the current fiscal year, but no impairment loss was recognized based on the results of impairment testing. - FY2022-Q2MitigatedAnnual report
「This was attributable to the reversal of the impairment loss recognized in the Madagascar nickel business in the same period of the previous fiscal year, increased sales volumes and higher profit following the resumption of operations in March, and the recognition of one-off gains associated with debt restructuring. It also reflected higher profit resulting from elevated resource prices and firm performance in the chemicals trading and agricultural materials businesses.」
Results in resource-related businesses improved due to the resumption of operations and increased sales volumes in the Madagascar nickel business, one-off gains associated with debt restructuring, and continued high resource prices. - FY2022-Q1MitigatedAnnual report
「This was attributable to the reversal of the impairment loss recognized in the Madagascar nickel business in the same period of the previous fiscal year, increased sales volumes and higher profit following the resumption of operations in March, and the recognition of one-off gains associated with debt restructuring. It also reflected higher profit resulting from elevated resource prices and firm performance in the chemicals trading and agricultural materials businesses.」
Resource prices remained high, and operations in the Madagascar nickel business resumed in March, increasing sales volumes. Results in the first quarter of the current fiscal year improved with respect to the impairment risk arising from resource prices and operating suspensions that had materialized in the past. - FY2021-Q3MaterialisedAnnual report
「In addition, in the third quarter of the current fiscal year, the future production volume in the business plan was revised again, taking into account past performance, including the suspension of operations, in order to make stable, high-level operations after the resumption of operations more certain. As a result, additional impairment losses were recognized on the fixed assets held by the Project Companies down to their recoverable amount. Due to the recognition of these impairment losses by the Project Companies, a loss of ¥84,810 million on the investment in the Project Companies was recognized in “Share of profit or loss of investments accounted for using the equity method” in the condensed quarterly consolidated statement of comprehensive income.」
The Madagascar nickel business recognized an additional loss of ¥84.81 billion in light of the suspension of operations and the revision of future production volumes. Impairment risk arising from resource prices and operating performance materialized further. - FY2021-Q2MaterialisedAnnual report
「In the Resources and Chemicals segment, profit declined by ¥90.9 billion year on year to a loss of ¥57.7 billion, mainly because lower resource prices reduced profit in the Australian coal business, the suspension of mining operations reduced profit in the Madagascar nickel business and the Bolivian silver, zinc and lead business, and an impairment loss of ¥55 billion was recognized in the Madagascar nickel business.」
Deterioration in earnings and impairment losses continued in resource-related businesses due to lower resource prices, the suspension of mining operations and the ¥55 billion impairment loss in the Madagascar nickel business. The steel pipe business also recognized an impairment loss of approximately ¥12 billion in the second quarter. - FY2021-Q1MaterialisedAnnual report
「During the first quarter of the current fiscal year, Ambatovy Minerals S.A., a nickel mining company in Madagascar in which the Company holds a 47.7% interest through its wholly owned subsidiary Summit Ambatovy Mineral Resources Investment B.V., and Dynatec Madagascar S.A., a nickel refining company, together referred to below as the “Project Companies,” revised their business plan in light of the temporary suspension of operations due to the spread of COVID-19 and the decline in the medium- to long-term nickel price outlook. As a result, impairment losses were recognized on the fixed assets held by the Project Companies down to their recoverable amount. Accordingly, a loss of ¥54,956 million on the investment in the Project Companies was recognized in “Share of profit or loss of investments accounted for using the equity method” in the condensed quarterly consolidated statement of comprehensive income.」
The Madagascar nickel business incurred an impairment loss of approximately ¥55 billion following the suspension of operations due to COVID-19 and the decline in the nickel price outlook. - FY2020MaterialisedAnnual report
「One-off profit and loss was a loss of approximately ¥77 billion, as the steel pipe business, primarily in the United States, recognized impairment losses and inventory valuation losses due to declining crude oil prices and other factors, and the Bolivian silver, zinc and lead business recognized one-off losses. This represented a decline in profit of approximately ¥69 billion from the previous fiscal year.」
Against a backdrop of lower resource and crude oil prices, the steel pipe business, primarily in the United States, incurred impairment losses and inventory valuation losses, while resource-related businesses also recognized one-off losses. - FY2020-Q3RestatedAnnual report
「In international commodity markets, crude oil prices temporarily surged against a backdrop of production cuts by oil-producing countries and increased geopolitical risk, but the rise did not persist because of oversupply. Many other commodities continued to languish due to slower global economic growth.」
The disclosure stated that the rise in crude oil prices did not persist because of oversupply, while many other commodity markets continued to languish against a backdrop of slower global economic growth. - FY2020-Q2WorsenedAnnual report
「In international commodity markets, crude oil prices declined as the effect of production cuts faded, while many other commodities continued to languish amid concerns about the expansion of trade issues and the risk that they will be prolonged.」
Crude oil prices continued to decline and other commodity markets remained weak, reducing profit in the Madagascar nickel business, the Australian coal business and other operations. - FY2020-Q1WorsenedAnnual report
「In international commodity markets, crude oil prices declined as the effect of production cuts faded, while many other commodities continued to languish amid concerns about the expansion of trade issues and the risk that they will be prolonged.」
The disclosure stated that crude oil prices had declined and other commodity markets had continued to languish against a backdrop of trade issues that had carried over from the previous fiscal year. Lower resource prices reduced profit in the Bolivian silver, zinc and lead businesses and the Madagascar nickel business, and lower earnings were also expected in the resource business in fiscal 2019. - FY2019-Q3MaterialisedAnnual report
「In the third quarter of the current fiscal year, the assets of the Madagascar nickel business were revalued based on the latest long-term business plan, taking into account medium- to long-term price trends. As a result, an impairment loss of ¥10,431 million was recognized.」
As weak resource prices continued, an impairment loss of ¥10.431 billion actually materialized in the Madagascar nickel business. - FY2019-Q2RestatedAnnual report
「International commodity markets have turned down, with many commodities other than crude oil declining amid concerns about the expansion of trade issues and the risk that they will be prolonged, while crude oil prices have remained high due to production cuts by oil-producing countries.」
The disclosure continued to describe the situation indicated in the previous quarter, in which many commodities other than crude oil had turned downward against a backdrop of expanding trade issues and the risk of their prolonged impact. - FY2019-Q1WorsenedAnnual report
「International commodity markets have turned down, with many commodities other than crude oil declining amid concerns about the expansion of trade issues and the risk that they will be prolonged, while crude oil prices have remained high due to production cuts by oil-producing countries.」
The disclosure stated that, from the generally upward trend in the previous fiscal year, many commodities other than crude oil had turned downward against a backdrop of expanding trade issues and the risk of their prolonged impact. The environment surrounding resource-price volatility had become less uniform. - FY2018MitigatedAnnual report
「This was attributable to the firm performance of the Bolivian silver, zinc and lead businesses and the South African iron ore business due to higher resource prices, as well as the reversal of the previous fiscal year's impairment loss of ¥33.6 billion in the Chilean copper and molybdenum business.」
The Resources and Chemicals business improved as resource prices rose, and the reversal of the impairment loss incurred in the previous fiscal year in the Chilean copper and molybdenum business was also reflected. However, the risk of fluctuations in resource prices itself continues to be disclosed. - FY2018-Q3MitigatedAnnual report
「International commodity markets have moved past the price adjustment phase and have generally been on an upward trend, supported by declining inventories amid stronger global demand, although conditions have varied by commodity.」
Regarding the downward pressure from weak resource prices, international commodity markets improved from the generally stable conditions of the previous quarter to a generally upward trend, supported by the demand and inventory environment. - FY2018-Q2MitigatedAnnual report
「International commodity markets have moved past the price adjustment phase and have generally remained stable, although conditions have varied by commodity.」
Regarding the downward pressure associated with weak resource prices, the disclosure continued to state that the price adjustment had run its course and that commodity markets were generally stable. It also indicated that higher resource prices had improved earnings in the Bolivian silver, zinc and lead businesses, the Australian coal business and other operations. - FY2018-Q1MitigatedAnnual report
「International commodity markets have moved past the price adjustment phase and have generally remained firm, although conditions have varied by commodity.」
Regarding the downward pressure on the Resources and Steel Pipe businesses from weak resource prices, the disclosure stated that the adjustment in international commodity markets had run its course and that markets were generally firm. Although higher resource prices have increased profit in the Bolivian silver, zinc and lead businesses and the Australian coal business, the disclosure did not state that the risk had disappeared. - FY2017RestatedAnnual report
「In the Resources and Chemicals segment, an impairment loss was recognized in the Chilean copper and molybdenum business during the current fiscal year. The after-tax impact on profit for the period attributable to owners of the parent was ¥33,597 million.」
In the Chilean copper and molybdenum business, the impairment loss recognized in the third quarter was also reflected in full-year results. Impairment risk arising from resource prices and operating performance remains. - FY2017-Q3MaterialisedAnnual report
「In the third quarter, the company reviewed its long-term business plan for the Chilean copper and molybdenum business in light of recent operating results and medium- to long-term copper price trends, resulting in the recognition of an impairment loss of ¥33,601 million.」
The long-term business plan for the Chilean copper and molybdenum business was revised, and an additional impairment loss of ¥33.6 billion was recognized. Impairment risk arising from resource prices and operating performance materialized again. - FY2017-Q2RestatedAnnual report
「In the resources and chemicals business segment, the impact of falling resource prices, the recognition of a tax provision in the Bolivian silver, zinc and lead business, and the presence of one-time gains associated with business restructuring and other factors in the same period of the previous year resulted in a loss of ¥15.2 billion, a ¥33.7 billion decline in profit year on year.」
The impact of falling resource prices continued through the first half, and the resources and chemicals business segment posted a loss of ¥15.2 billion. - FY2017-Q1RestatedAnnual report
「For the fiscal 2016 outlook, non-resource businesses, including the principal environmental and infrastructure and media and lifestyle-related businesses, are expected to remain generally firm, while the resource businesses and steel pipe business are expected to continue facing a difficult operating environment due to weak resource prices.」
The company stated that the difficult impact of weak resource prices on the resource and steel pipe businesses was expected to continue in fiscal 2016. - FY2016MaterialisedAnnual report
「Although non-resource businesses remained generally firm in fiscal 2015, the performance of the resource businesses and steel pipe business deteriorated due to falling resource prices. In addition, impairment losses totaling ¥195.1 billion were recorded for multiple projects, mainly resource upstream projects, resulting in consolidated net income of ¥74.5 billion, regrettably well below the ¥230.0 billion target.」
Impairment losses were recorded for the Madagascar nickel, South African and Brazilian iron ore, Chilean copper and molybdenum, and Australian coal businesses, resulting in the profit target not being met.