Earthquake reconstruction efforts boost Sumitomo Osaka’s nine month operating profit

Sumitomo Osaka Cement is expected to report a strong gain in operating profit for the first nine months of the fiscal year on the back of earthquake reconstruction efforts.

The company is expecting a 90 per cent YoY increase in consolidated operating profit to about JPY9bn for the nine months ended 31 December 2012.

This would represent the highest figure for the April-December period in five years. Sales were up by approximately four per cent with consumption for ports and roads in the disaster-stricken Tohoku region rising strongly.

Cement sales, however, have been sluggish due to a shortage of personnel at construction sites, according to a Nikkei report. Fuel costs have also been higher than expected since the start of the year because the weaker yen has caused coal procurement costs to rise. Sumitomo Osaka Cement intends to cut transport costs and other expenses to compensate.

The cement company is expected to stick with its projections for the full year through 31 2013, which see a 66 per cent gain in operating profit to JPY13.5bn (US$145.8m), when it releases earnings mid-month.

Sumitomo Osaka Cement operates four integrated cement plants with a combined capacity of 8.1Mta.