First Read: Sumitomo Corporation

Research evidence excerpt

First Read: Sumitomo Corporation

set by improved operations in North America). Other commodity and food-related

03/28E 150.9 144.3

businesses contributed ¥10.0bn while restructuring/incubation contributed ¥4.0bn to 03/29E 155.1 153.9

yoy profit growth. External factors such as commodity prices and forex rates also lifted

profit by ¥24.0bn yoy. We believe the earnings growth achieved under the company's Harunobu Goroh

new strategic direction of harvesting returns on growth investments and improving Analyst

asset turnover exceeded market expectations. harunobu.goroh@ubs.com

+81-3-5208 6215

Q: Was FY3/27 guidance revised? Lihui Huang

AnalystA: FY3/27 guidance for NP was left at ¥630.0bn (+¥29.7bn, +4.9% yoy). However,

lihui.huang@ubs.com

management indicated it may revise guidance at the Q2 results announcement after +81-3-5208 6217

assessing the situation in the Middle East, and the market consensus looks likely to shift

higher. We are paying attention to the financial improvement measures for FY3/27-29

that were announced around the start of the fiscal year (in May 2026), including (1)

asset reduction of ¥1.0trn over three years, with ¥600.0bn targeted in FY3/27 and (2) a

new plan to sell ¥700.0bn of turnover-type businesses within income-generating

businesses, such as real estate and electrical power, over three years. We believe these

measures will drive improvement in ROE and market consensus forecasts. Investment

activity during Q1 totalled ¥500.0bn (including ¥330.0bn for Sumisho Air Lease and real

estate acquisitions in Japan and overseas), while asset replacement activity totalled

¥100.0bn (including the Belgian offshore wind power business, domestic and overseas

real estate, and strategic shareholdings).

Q: How would we expect investors to react?