Sumitomo Corporation (8053) Q2 2027 earnings summary

Executive summary

• H1 FY2026 revenue rose 10.8% YoY to ¥3,918.6B and parent-attributable profit rose 15.5% to ¥347.9B; profit before tax fell 7.4% to ¥345.0B.

• Underlying profit was ¥334.0bn, up ¥75.0bn YoY; the 8 Growth Areas collectively added ¥22.0bn in profit.

• FY2026 parent-attributable profit guidance rose ¥40.0B to ¥670.0B; underlying profit forecast is also ¥670.0B.

Financial highlights

• Gross profit increased to ¥768.3B from ¥706.7B; SG&A rose to ¥571.5B from ¥525.6B, including higher personnel costs.

• Profit for the period was ¥360.6B versus ¥331.3B; income taxes shifted from an expense of ¥41.1B to a benefit of ¥15.7B.

• Comprehensive income fell 19.7% to ¥298.4B, with foreign-currency translation differences of -¥104.9B versus +¥19.8B a year earlier.

• Asset replacement and extraordinary profits/losses were ¥13.0bn, down ¥30.0bn YoY; underlying profit excludes these items.

Outlook and guidance

• FY2026 forecast comprises ¥670.0B underlying profit, ¥30.0B in asset replacement and extraordinary profits, and a -¥30.0B loss buffer; forecast before the buffer is ¥700.0B.

• Annual dividend forecast increased ¥4 to ¥44 per post-split share, including a ¥22 interim dividend; policy targets a total payout ratio of at least 40% and progressive dividends.

• ROE is forecast at ~14%, above the Medium-Term Management Plan 2026 target of 12% or higher.

• Net D/E is expected to improve from 0.81x at H1-end to ~0.6x by FY-end through profit accumulation and accelerated asset replacement.

• H2 outlook includes Middle East-related shipment pressure in Energy Tubular, higher domestic auto leasing costs, and higher tax costs from Q3 onward.