Statement re Sakura KCS Revision of Fiscal Year 2003
October 31 2003 - 7:23AM
UK Regulatory
Sumitomo Mitsuit Banking
Revision of Fiscal Year 2003 Earnings Forecast
by SMFG's Consolidated Subsidiary, Sakura KCS Corporation
Sumitomo Mitsui Financial Group, Inc. ("SMFG") announced today that
its consolidated subsidiary, Sakura KCS Corporation, revised its
earnings forecasts for the fiscal year ending March 31, 2004 and the
six months ended September 30, 2003 initially announced on May 23,
2003. (see Appendix)
(Appendix)
Sakura KCS Corporation Announces
Revision of Earnings Forecast for Fiscal Year 2003
Sakura KCS Corporation ("Sakura KCS") announced today the revision of
its earnings forecast for the fiscal year ending March 31, 2004
initially announced on May 23, 2003.
1.Revision of Earnings Forecast (Six months ended September 30, 2003)
(Consolidated) (Millions of Yen)
Revenues Operating Profit (Loss) Net Income (Loss)
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Previous forecast (A) 12,300 290 150
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Revised forecast (B) 11,485 113 95
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Difference (B)-(A) (815) (177) (55)
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Percentage change (6.6)% (61.0)% (36.7)%
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(Ref.) Previous 1st half 12,486 369 79
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(Non-Consolidated) (Millions of Yen)
Revenues Operating Profit (Loss) Net Income (Loss)
------------------------------------------------------------------------------------------------------------------------
Previous forecast (A) 12,000 280 145
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Revised forecast (B) 11,181 67 67
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Difference (B)-(A) (819) (213) (78)
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Percentage change (6.8)% (76.1)% (53.8)%
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(Ref.) Previous 1st half 12,155 324 68
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2.Revision of Earnings Forecast (Fiscal year 2003 ending March 31, 2004)
(Consolidated) (Millions of Yen)
Revenues Operating Profit (Loss) Net Income
(Loss)
------------------------------------------------------------------------------------------------------------------------
Previous forecast (A) 25,000 730 320
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Revised forecast (B) 23,900 510 260
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Difference (B)-(A) (1,100) (220) (60)
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Percentage change (4.4)% (30.1)% (18.8)%
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(Ref.) Previous fiscal year 24,948 731 90
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(Non-Consolidated) (Millions of Yen)
Revenues Operating Profit (Loss) Net Income (Loss)
------------------------------------------------------------------------------------------------------------------------
Previous forecast (A) 24,450 710 310
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Revised forecast (B) 23,300 450 225
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Difference (B)-(A) (1,150) (260) (85)
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Percentage change (4.7)% (36.6)% (27.4)%
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(Ref.) Previous fiscal year 24,322 649 93
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3. Reason for Revision
Sakura KCS had expected revenues and profits to decline in the six months ended
September 30, 2003 due to weaker real estate registration system business, and
weaker hardware management business due to banks' centralizing their operations.
Though the financial results in the first quarter (April - June) were in line
with the initial forecast, in the second quarter (July - September), business
negotiations were postponed, competition intensified, and prices fell as
customers kept down capital spending on information systems, resulting in much
greater-than-expected reduction in revenues from system consulting and hardware
sales. Consequently, it expects first half revenues, operating profit and net
income to have been lower than initially expected.
Though the postponed business negotiations are back on track and business
related to merger of municipalities and other self-governing entities is
expanding, Sakura KCS expects the second half to show weaker results (about 10%
lower than the initial estimates) given the uncertain demand and price outlook.
Sakura KCS intends to maintain the interim-dividend of 5 yen per share.
[Breakdown of 1st half revenues] (Millions of Yen)
1st quarter 2nd quarter 1st half
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April - vs estimate July - Sept. vs estimate April - vs estimate
June Sept.
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Systems consulting 1,814 58 3,754 (336) 5,568 (278)
System management service 1,190 12 1,365 (103) 2,555 (91)
Other services 462 (33) 501 38 964 5
Hardware sale 1,158 17 1,237 (469) 2,396 (452)
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Total 4,626 54 6,859 (870) 11,485 (815)
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