Bridgestone net income plummets by 68 percent as commodity prices bite

Tokyo - Bridgestone Corp. has reported a 68 percent plunge in net income for the first half of the year, blaming the reverse on a global surge in oil and rubber prices.

The Japanese tyre maker posted a half-yearly net income of 32800 million yen (€221 million) for the group while its tyre division also suffered, reporting a 16 percent fall in operating income to 57900 million yen.

Despite the profit setback, half-year sales rose by 13 percent to 1424800 million yen for the group and 13 percent to 1130700 million yen for the tyre business.

''The operating environment is expected to remain challenging in 2006,'' the company said in its report.

''The demand for tyres has been robust, especially in markets outside Japan.

''Profitability is still an issue, however, as prices for natural rubber and other raw materials used in the companies' products remain high.''

Bridgestone's European division was the most under-performing, recording a 25 percent drop in half-year operating income of 6500 million yen despite a 12 percent growth in sales to 199200 million yen.

The tyre maker said European sales of passenger and light truck tyres increased in both the original equipment and replacement sectors and expected the growth to continue.

The Japanese division posted an eight percent drop in operating income to 53300 million yen and a nine percent rise in sales to 593700 million yen.

The company expected sales in Japan to remain steady but exports to exceed last year's levels.

In its Americas division, Bridgestone posted a modest four percent rise in operating income to 20100 million yen and a 20 percent growth in sales to 593700 million yen, despite incurring a 15800 million yen loss from the closure of two tyre plants in the region.

The company predicted a decline in sales of passenger and light truck tyres but a rise in truck and bus tyre sales.