Sumitomo Rubber posts big increase in nine-month earnings

Kobe, Japan – Sumitomo Rubber Industries (SRI) has posted a 46.6% year-on-year increase in earnings (business profit) for the first three quarters to Yen61.5 billion (€375 million), on sales up 2.8% to Yen875 billion.

Operating profit for the nine-month period, however, declined 72% year-on-year to Yen11.5 billion, largely due to the group's decision to close its US tire factory, SRI reported 8 Nov.

The Japanese group expects profits to further fall to Yen5 billion for full-year 2024, as it absorbs costs linked to the closure of the Tonowanda, New York site. (ERJ report)

During the nine months ended 30 Sept, the economic environment continued to recover gradually, although some regions “remained at a standstill.”

While Japan's economy is recovering, the tire & rubber products maker expects a “deceleration” in overseas economies linked to continued high interest rates in the US and Europe and weak real estate market in China.

By market-segment, SRI's tire business reported a 3.9% year-on-year increase in sales for the first nine months, to Yen748.7 billion, while business profit increased 60.6% to Yen51.1 billion.

In the domestic OE market, volumes fell significantly below the 2023 level due to a typhoon in late August that impacted car production in the country.

Within the domestic replacement tire segment, meanwhile, SRI said its market-share grew despite a decline in year-on-year volumes.

Overseas, both OE and replacement segments saw volumes decline, while OE tire sales were largely impacted by lower supply to Japanese car makers in Asia.

Replacement tire markets in China and southeast Asia remained flat, while Europe and Americas reported a dip in volumes, continued SRI.

Revenue, however, improved despite lower volumes, due to a weaker Yen, the group added.

SRI's sports business, which includes golf and tennis goods, reported a marginal improvement in sales to Yen97.6 billion, though business profit fell 10.9% year-on-year to Yen7.9 billion.

‘Industrial and other products’ business united nearly doubled business profit to Yen2.2 billion, up 89.7% compared to last year, despite a 13.3% decrease in sales to Yen28.4 million.

Here, SRI said, sales of rubber parts for medical applications decreased due to the divestment of subsidiary in Europe.

Sales of “daily life supplies” declined year-over-year while shipments of infrastructure products and rubber parts for office equipment increased.