⚠ Two Losses in Twelve YearsModerate threat

Sumitomo Corporation (8053) — threat to the moat

Sumitomo has had two loss years in twelve, both from resource write-downs.

Sumitomo lost money in the year to March 2015, ¥73.2 billion, and in the year to March 2021, ¥153.1 billion1. Its return on equity fell to 3.2% in the year to March 2016 and 6.4% in the year to March 20202.

Net profit (¥ bn, years to March)223.12014-73.22015308.52018-153.12021565.32023600.32026Losses shown as magnitudes; Sumitomo financial data workbook
Two losses, then five profitable years.

The losses were concentrated in resources. Ambatovy alone accounted for large write-downs in 2016 and 202034. A trading house whose losses come from a few large resource projects has a concentration problem that its diversification elsewhere does not solve.

Since the year to March 2022, profit has been above ¥380 billion every year5.

Between the losses, returns were uneven. Return on equity was 10.0% in the year to March 2014, 12.5% in 2018, 16.2% in 2022 and 2023, and 9.4% in 20246. A portfolio that swings from a loss to 16% and back to 9% within a few years is one in which a few large positions decide the outcome.

The measure is the next resource downturn. A year of lower commodity prices without a group loss would show the portfolio changes working.

References
  1. ReportedSumitomo lost money in the year to March 2015, ¥73.2 billion, and in the year to March 2021, ¥153.1 billion.
    Sumitomo Corporation, Financial Data workbook for the year to March 2026 - historical revenue, profit, EPS, ROE, balance sheet, cash flows and share prices from the year to March 2014, and the risk buffer against risk assets. — FY to March 2014-2026 · publ. May 2026 · source ↗
  2. ReportedIts return on equity fell to 3.2% in the year to March 2016 and 6.4% in the year to March 2020.
    Sumitomo Corporation, Financial Data workbook for the year to March 2026 - historical revenue, profit, EPS, ROE, balance sheet, cash flows and share prices from the year to March 2014, and the risk buffer against risk assets. — FY to March 2014-2026 · publ. May 2026 · source ↗
  3. ReportedAmbatovy alone accounted for large write-downs in 2016 and 2020.
    Bloomberg, 13 January 2016 - Sumitomo Corp withdraws forecasts after a ¥77 billion charge on the Ambatovy nickel project. — January 2016 · publ. 13 January 2016 · source ↗
  4. ReportedAmbatovy alone accounted for large write-downs in 2016 and 2020.
    Sumitomo Corporation release, July 2020 - impairment loss of approximately ¥55 billion on the Ambatovy nickel project in Madagascar in the first quarter of FY2020. — July 2020 · publ. July 2020 · source ↗
  5. ReportedSince the year to March 2022, profit has been above ¥380 billion every year.
    Sumitomo Corporation, Financial Data workbook for the year to March 2026 - historical revenue, profit, EPS, ROE, balance sheet, cash flows and share prices from the year to March 2014, and the risk buffer against risk assets. — FY to March 2014-2026 · publ. May 2026 · source ↗
  6. ReportedReturn on equity was 10.0% in the year to March 2014, 12.5% in 2018, 16.2% in 2022 and 2023, and 9.4% in 2024.
    Sumitomo Corporation, Financial Data workbook for the year to March 2026 - historical revenue, profit, EPS, ROE, balance sheet, cash flows and share prices from the year to March 2014, and the risk buffer against risk assets. — FY to March 2014-2026 · publ. May 2026 · source ↗
Sources
Generated September 24, 2026