Bridgestone focuses on ‘new threats’ as earnings dip
12 Nov 2024
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Group names structural changes in automotive industry, low-cost imports as new threats
Tokyo – Bridgestone Corp. has set ‘urgent management priorities’ to tackle “new threats and past negative legacies” as nine-month earnings dipped year-on-year.
The Japanese group described such threats as structural changes in the automotive industry due to the rise of Chinese electric vehicles.
Furthermore, an increase of low-end imports, especially in Europe and Latin America, is accelerating changes in tire “market, industry, and profit structure,” said Bridgestone in its third quarter report 11 Nov.
The Tokyo-based group said it aimed to secure and improve financial performance in 2024 by enhancing sales mix with a focus on premium tires.
Moreover, the tire & rubber group is reinforcing initiatives for global business cost reduction through the second stage of fixed cost reduction and business “restructuring & rebuilding”.
During the third quarter, Bridgestone reported flat sales at Yen1,100 billion (€6.7 billion), with stable adjusted operating profit at Yen124 billion.
Over the first three quarters, however, adjusted operating profit fell 3% to Yen353 billion, on 2% higher sales of Yen3,2700 billion.
Earnings margin for the nine-month period declined 0.5% to 10.8%, according to Bridgestone.
The group linked the earnings decline to lower volumes, less favourable pricing, challenging business environment in Latin America and conversion costs at production sites.
These were partially offset by the weaker yen, stronger mix and a slight recovery in raw materials costs.
Bridgestone linked higher nine-month sales to tailwind from the currency exchange, while ‘continued deterioration especially in Americas’ resulted in decrease in profits.
Segment-wise, passenger car and light vehicle (PS/LT) reported a 4% year-on-year increase in sales to Yen1,800 billion during the first nine months of the year, with adjusted earnings up 3% at Yen194 billion.
Truck & bus (TB) segment posted a 28% decline in nine-month adjusted earnings to Yen43.6 billion, on flat sales of Yen751 billion.
Specialities, including agriculture, off-road, aircraft and two-wheeler tires, saw an 8% increase in adjusted earnings to Yen111 billion, on flat sales of Yen477 billion.
Adjusted earnings in the diversified products segment more than halved to Yen4.7 billion, despite a marginal increase in revenue to Yen225 billion during the first three quarters of the year.
For the full year, Bridgestone confirmed the guidance offered in August, targeting sales of Yen4,410 billion, up 2% year-over-year, and adjusted operating profit of Yen490, 2% higher than 2023.
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