Tokai first-half profits rise on carbon black growth

Tokyo - Tokai Carbon has seen operating income increase sharply on the back of strong performance by its carbon black and other core businesses.

For the first six months of the year, operating income rose 30% year-on-year to Yen21.7 billion (€136 million), on sales 14% higher at Yen178 billion, Tokai Carbon reported 8 Aug.

Earnings (EBITDA) for the group rose 19% to just under Yen40 billion, the Japanese group also noted.

While total sales came in 10% lower than an earlier estimate of Yen198 billion, operating income was up 8.7% compared to the Yen20 billion forecast in May.

Tokai Carbon linked the higher earnings and profits largely to “steady growth in major businesses centred on carbon black and an increase in foreign exchange gains."

In the carbon black division, first-half sales were up 15% year-on-year to Yen74 billion, while operating income more than doubled to Yen10.7 billion.

Sales volumes for tires remained at around the same level year-on-year, Tokai Carbon noting this was “despite being impacted by production adjustments for some customers.”

Higher productivity and the pass-through of environmental investment costs, particularly in North America, helped push up sales and operating income, the group added.

The group, meanwhile, improved margins by setting "appropriate selling prices" that reflected environmental investments and raw material cost increases.

Tokai Carbon went on to note that demand for new cars was recovering, though demand for replacement tires, particularly in the trucks & bus segment, was 'slow'.

While near-term recovery in demand for replacement tires was "uncertain", Tokai Carbon sees better medium-term prospects on "tighter a demand-supply balance in US and other markets."