Sumitomo Metal Mining (TYO: 5713) on Tuesday cut its fiscal 2026 net profit forecast by 26% to 161 billion yen ($1 billion) due to a hefty impairment loss on its nickel assets in the Philippines.
It booked a 42.6 billion yen impairment loss in its April to September first half on Coral Bay Nickel Corp, which is set to cease production between fiscal 2028 and 2030, after a review of equipment disposal and site restoration costs.
While copper and gold prices are expected to remain high, the company expects the yen to appreciate in the October to March second half. Demand for materials used in electronic components for data centres is expected to remain robust.
Net profit for the first half rose 67% year-on-year to 90 billion yen, driven by higher metals prices.
Executive Officer Yasuhiro Miyake declined to provide a forecast for 2027 copper treatment and refining charges, but said difficult market conditions were likely to persist.
The Toyo Smelter & Refinery is operating at reduced capacity due to a technical issue expected to be resolved in the current quarter, Miyake said.
Annual refined copper production is now forecast at around 400,000 metric tons, down 46,000 tons from the May estimate.
($1 = 157.9700 yen)
(Reporting by Yuka Obayashi; Editing by Jan Harvey)
