S&P lowers Sumitomo view to negative

Standard & Poor's said it revised the outlook on the long-term corporate credit rating on Sumitomo Corp. to negative from stable.

The agency also said it affirmed the long-term corporate credit and debt ratings on the company at A- and short-term corporate credit rating at A-2.

The prospects for Sumitomo’s profitability and capital adequacy are worse than previous assumptions due to expected huge impairment losses and prolonged slump in resource prices, S&P said.

The agency also said it revised the outlooks to negative on Sumitomo Corp of Americas and Sumitomo Corp Capital Europe plc and affirmed the A- long-term and A-2 short-term ratings on both companies, which are Sumitomo's overseas subsidiaries.

On Jan. 13, Sumitomo announced it would record impairment losses of about ¥77 billion for its Ambatovy nickel project after the earnings outlook for the large-scale nickel extraction project in Madagascar worsened, S&P said.

The agency said it believes this will cause the company to substantially miss its bottom-line profit guidance of ¥230 billion in fiscal 2015.

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