Sumitomo Corp. swung to a net loss in the third quarter and cut its full-year profit target by more than half as impairments on the value of its resources investments widened amid the slump in commodity prices.
Net income is estimated at ¥100 billion for the year through March, below its October forecast of ¥230 billion, the Tokyo-based trading house said in a statement. Sumitomo last month withdrew its profit target after announcing a ¥77 billion writedown on its Madagascan nickel project. The company said Friday that full-year impairments would likely rise to ¥170 billion.
Sumitomo joins a swath of commodity companies in posting writedowns due to faltering Chinese demand, sliding raw materials prices and the global oil glut. Sumitomo Metal Mining Co., the smelter that shares the trade house's name, slashed its full-year net income forecast on Friday by 93 percent to ¥5 billion after posting a charge of ¥68.9 billion on its Sierra Gorda copper mine in Chile, a project in which Sumitomo Corp. is a partner.