Sumitomo to book Y35 billion provision in 2023/2024 for losses at Myanmar unit

TOKYO : Japanese trading house Sumitomo Corp said on Wednesday it will book a provision of 35 billion yen ($230 million) in its results for the year just ended to account for impaired loans at its telecoms joint venture in Myanmar.

KDDI Summit Global will record a 105 billion yen provision in the financial year ended March 31, due to delays in the collection of receivables, Sumitomo said in a statement. The provision accounts for 80 per cent of the loans of KDDI Summit Global Myanmar (KSGM), which is 50.1 per cent owned by KDDI and 49.9 per cent by Sumitomo.

As a result KDDI Summit Global will record a 105 billion yen provision in the financial year ended March 31, due to delays in the collection of receivables, Sumitomo said in a statement.

“(The) Myanmar business continues to face country risk, and there are various possible options for the future, but we intend to continue the business there for now,” a Sumitomo spokesperson said.

Sumitomo’s share of the Myanmar unit’s impaired loans is 52.5 billion yen, but the impact on its earnings will be 35 billion yen, as the trading company will reverse an impairment loss of 17.5 billion yen it had booked in the year that ended March 31, 2023, it said.

The 35 billion yen loss was not included in Sumitomo’s net profit forecast made in February of 500 billion yen for the year ended March 31 and it is still reviewing group results, the company said.

KSGM will continue to make efforts to collect dollar-denominated lease receivables, it added.

($1 = 151.8700 yen)