Sumitomo Corp eyes record profit, creates loss buffer against US tariffs

TOKYO: Japanese trading house Sumitomo Corp on Thursday forecast a record net profit of 570 billion yen ($4 billion) for the current fiscal year and set aside a financial buffer to hedge against the potential negative impact of U.S. tariffs.

Sumitomo posted 562 billion yen in net profit for the year ended in March, up 45.4% from a year earlier and beating analysts’ expectations of 554.2 billion yen, on strong non-mineral resources performance in segments including real estate.

Warren Buffett’s Berkshire Hathaway is a large minority shareholder in Sumitomo and other Japanese trading houses, including Mitsui, and has recently been increasing its ownership.

The company set aside a loss buffer of 40 billion yen, adding that while the direct impact of U.S. tariffs is expected to be limited, “a certain degree of indirect impact may arise and thus, a loss buffer has been set accordingly”.

Sumitomo plans to increase its annual dividend to 140 yen for the fiscal year ending next March, up from 130 yen now, and to buy back up to 2.9% of its shares worth 80 billion yen.

It forecasts nickel output at its Ambatovy nickel project in Madagascar at around 30,000 metric tons this year, up from under 30,000 metric tones last year, as a number of issues, including the pipeline, are being resolved.