Sumitomo Rubber reports double-digit growth in 2021 sales, profits

Kobe, Japan – Sumitomo Rubber Industries (SRI) has reported a strong 2021, helped by the performance of its tires and sports divisions.

Operating profit for the year was up 27% year-on-year at Yen49 billion (€370.8 million), on 18.4% higher sales of Yen936 billion, said SRI in a statement 9 Feb. Profit attributable to owners of parent was Yen29.5 billion, up 30% year-on-year. 

The Japanese group linked the performance to a recovery in the global economy and a moderate recovery in Japanese economy. 

While the business environment was hit by soaring freight costs as well as the rising prices of raw materials, SRI said there were "positive signs", such as the recovery trend in the US and European markets.

The tire business, which contributes the bulk of the group’s sales, saw a 1.1% rise in profit to Yen41.4 billion, on 17% higher sales of Yen795 billion.

In the Japanese OE market, sales fell year-on-year due to a decline in the automotive industry as a result of the global chip shortage. 

In the domestic replacement market, sales of both winter and summer tires increased. 

Despite the effects of chip shortages, OE demand in overseas markets rose year-on-year, particularly due to the Covid-hit low base of comparison in 2020. 

In the overseas replacement market, sales increased in the Asia and Oceania region due to the effects of the new products launched in China, as well as the expanded sales in Indonesia. 

In Europe, volumes grew due to “the effects of promotions such as racing activities” as well as a recovery in demand. 

SRI said its business in North America was ‘greatly affected’ by the tight supply/demand situation of shipping containers, as well as soaring freight costs. In South America, sales rose in response to robust local demand, met by locally-manufactured products.

Sales revenue in the sports business increased 44.4% year-on-year to Yen101.5 billion, and the business returned to profit at Yen ¥8.6 billion, up from a loss of Yen741 million last year. 

Here, SRI linked the increase to continued demand in the golf markets in Japan, North America and South Korea. Tennis goods markets also reported increases in sales.

SRI’s industrial and other products business underperformed, with the segment's business profit down 39% at Yen1.9 billion, on a 2.8% lower sales of ¥39.5 billion.

While sales of precision rubber parts for office machines as well as medical devices grew, infrastructure-based products as well as rubber gloves saw a decline in demand.