Sumitomo Riko upgrades earnings forecast on strong Q2

Tokyo – Sumitomo Riko has reported a 35.4% year-on-year increase in second quarter profits as both its automotive and general industrial operations grew during the three-month period.

Overall, the Japanese rubber products group posted operating profit of Yen17.3 billion for the three months to end of September, up from Yen12.8 billion last year.

Group sales increased 3.8% year-on-year to Yen309 billion, while net profit of Yen10 billion was up 72.1% compared to the same period last year, Sumitomo Riko reported 31 Oct.

The group’s automotive products segment posted a 25% increase in operating profit to Yen14.7 billion while sales rose 3.3% year-on-year to Yen280 billion.

Here, the group linked the improved profit to favourable currency effect, efficiency programmes, and cost-cutting measures, offsetting the effects of production cuts by major car makers.

General industrial products division increased revenue by 8.3% year-on-year to Yen30 billion, while operating profit grew sharply, at 157% to Yen2.6 billion yen.

Sumitomo Riko said revenue increased due to an increase in the production of high-pressure hoses and functional parts for printers, as well as the effects of a weaker yen.

For the full year, Sumitomo Riko revised down sales outlook by 1.6% from its previous forecast in July, to Yen615 billion – due to a strengthening yen.

In view of the strong second quarter earnings, the group adjusted operating profit outlook upwards by 15.2% to Yen38 billion compared to its July estimate.