Sumitomo Metal lifts FY profit f'cast on higher gold prices, weak yen

Sumitomo Metal Mining

07/08/2023 10:06

TOKYO, Aug 7 (Reuters) - Japan's Sumitomo Metal Mining
 5713.T  reported a 73% drop in first-quarter profit on Monday,
but lifted its full-year profit outlook by 26% thanks to
stronger-than-expected gold prices and one-off gains from a
weaker yen.
    Net profit is now forecast at 53 billion yen ($373 million)
for the year to March 31, 2024, up from its May guidance of 42
billion yen, although the revised figure still is down 67% from
last year's 161 billion yen.
    "Higher-than-expected gold prices and appraisal gains on
inventories due to the yen's depreciation are expected to boost
our earnings in the mineral resource segment," a company
spokesperson said.
    Net profit for the April-June quarter declined to 20.7
billion yen from 76.5 billion yen a year earlier, hit by sagging
nickel and copper prices. 
    Nickel prices in the quarter fell 23% from a year earlier to
$10.16 per pound while copper prices slipped 11% to $8,478 per
metric ton. Gold prices, meanwhile, rose 6% to $1,978 per troy
ounce. The yen has weakened against the U.S. dollar to 137.37
from 129.58 a year earlier.
    Sumitomo Metal also supplies the nickel-cobalt-aluminium
(NCA) cathode materials for Panasonic  6752.T  lithium-ion
batteries used in Tesla  TSLA.O  electric vehicles.
    Sales of materials used in automotive batteries rose in the
first quarter, the company said, but lower metals prices and
slow Chinese demand for electronic components for devices such
as smartphones and tablet computers eroded its profit in the
materials segment.  
    "Demand for battery materials will increase amid growing
environmental concerns, but a recovery in functional materials
will likely be delayed until next year due to prolonged
inventory adjustments and sluggish demand in China," Mihoko
Yano, Sumitomo Metal's executive officer, told a news
conference.
    
    ($1 = 142.1800 yen)

 (Reporting by Yuka Obayashi; Editing by Kirsten Donovan)
 ((Yuka.Obayashi@thomsonreuters.com; +813-4520-1265;))