Apr. 10, 2024
Sumitomo Corporation

Notice Concerning Provision for Doubtful Receivables in Telecommunications Business in Myanmar

Sumitomo Corporation hereby announces as follows.

1. Recording of provision for doubtful receivables

KDDI Summit Global Myanmar Co., Ltd. ("KSGM"), in which Sumitomo Corporation has a stake, supports the telecommunications business of Myanma Posts and Telecommunications (“MPT”) in Myanmar.
With respect to KSGM’s current lease receivables in dollars against MPT (approximately 130 billion yen as of March 31, 2024), KSGM will record a provision for doubtful receivables (approximately 105 billion yen; provision ratio of approximately 80% against outstanding receivables) in the fiscal year ended March 31, 2024 due to

  • (A) the ongoing dollar exchange regulations imposed by the Myanmar government in April 2022; and
  • (B) the continued operating deficit in the Myanmar telecommunications business as of the end of March 31 2024.

KSGM will continue to make efforts to collect dollar-denominated lease receivables for which the provision has been recognized.

Sumitomo Corporation expects to recognize a loss equivalent to its equity interest (approximately 35 billion yen*) on a consolidated basis in the fiscal year ended March 31, 2024. The loss had not been included in the full-year consolidated financial results forecast for the fiscal year ended March 31, 2024 announced on February 5, 2024. Sumitomo Corporation is currently reviewing its consolidated financial results for the fiscal year ended March 31, 2024 by taking into account this as well as other projects.

  • In addition to the provision of approximately 52.5 billion yen in allowance for doubtful accounts (equity interest ratio of Sumitomo Corporation is 49.9%), the reversal of approximately 17.5 billion yen of impairment losses on the investments in telecommunications business in Myanmar in the fiscal year ended March 31, 2023 will be recognized.

2. Others

Unfortunately, we acknowledge the persistently challenging situation in Myanmar, characterized by frequent regional conflicts and all businesses in Myanmar have been placed in a difficult situation, we recognize there are many opinions regarding to business. We will continue to pursue ways to respect human rights in accordance with international human rights norms. Doing so will include adherence to the UN Guiding Principles on Business and Human Rights and  Sumitomo Corporation Group’s Human Rights Policy , while taking care to ensure the safety of local employees, their families, and other related parties. In addition, we will consider appropriate actions by monitoring changing situations.

Corporate Communications Department, Sumitomo Corporation
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