Bridgestone results down double-digits in first half

Tokyo — Bridgestone Corp. posted a 68.3% drop in operating income and a net loss for the six months ended 30 June on 22.1% lower sales.

For the first half of fiscal 2020, Bridgestone reported operating income of Yen48.2 (€385 million) million on sales of Yen1,355 billion. The net loss was Yen22 billion.

Bridgestone attributed the earnings and sales declines to the negative effects of the Covid-19 pandemic on the global economy.

For the full year, Bridgestone is forecasting the trend established in the first half will continue — sales will fall about 23% shy of fiscal 2019 revenue, with pre-tax operating income falling 70% short.

Bridgestone noted reduced volumes and currency depreciation impacts were the primary reasons for the lower earnings. Offsetting these negative factors were gains from lower raw materials and operating expenses and improved price/mix effect.

In the tires business, all units were affected by the pandemic: passenger/light truck tire activities' sales fell 24.9%, truck/bus tire activities were off 27.1% and "other" tire activities (OTR, farm, aircraft, motorcycle, etc.) were down 20.8%.

Sales in Japan fell 18% to Yen357 billion during the first half, revenue in Americas declined 22% to Yen646 billion.

The two regions of Europe, Russia, Middle East, Indian and Africa (EMEA) and China, Asia Pacific posted 23% decreases in sales to Yen249 billion and Yen181 billion respectively.

During the period, Bridgestone booked asset "impairment" losses of Yen10.5 billion million and Yen18.4 billion, respectively, to cover recalculated values for the company's "property, plant and equipment" in the Europe, Russia, Middle East, India and Africa segment and its equity investment in TireHub LLC in the Americas.

An impairment loss is typically defined as "recognised reduction" in the carrying amount of an asset triggered by a decline in its fair value.

Bridgestone said the TireHub writeoff is related to its determination that the "intended revenue [from TireHub] is no longer expected as a result of changes in the business environment, such as the impacts of Covid-19."

Bridgestone's diversified products business reported sales of Yen244.7 million and an operating loss of Yen9 billion during the first half.