TOKYO -- Sumitomo Metal Mining expects to log 68 billion yen ($600 million) in group net profit for the year ending in March, rebounding from a net loss of 18.5 billion yen last year as higher prices for nonferrous metals improve profitability.
The Japanese company raised its forecast by 5 billion yen Thursday while announcing earnings for the April-September half.
Pretax profit is pegged at 97 billion yen after a loss of 1.5 billion yen last year. And rising copper, nickel and cobalt prices have pretax profit poised to beat guidance by 3 billion yen in the natural resources segment and by 6 billion yen in the smelting and refining business.
The higher metal prices will absorb an 8.9 billion yen loss booked in the first half stemming from an unsuccessful dispute over past royalties associated with an equity-method affiliate's copper mine.
Sumitomo Metal now also projects a 15% rise in annual sales to 903 billion yen, up 48 billion yen from an earlier estimate. Operating profit is seen growing 17% to 89 billion yen, or 14 billion yen more than previously forecast.
Sales for the just-ended half climbed 21% on the year to 442.1 billion yen, while net profit jumped 11-fold to 35.1 billion yen. In addition to fewer losses from the Sierra Gorda mine in Chile, where development is behind schedule, the company did not book exchange rate losses as it did last year, contributing to the improved results.
Strong earnings also prompted Sumitomo Metal to increase its annual dividend forecast by 4 yen to 40 yen.