Bridgestone Corp saves Australian unit's board from dismissal by minority shareholders

Adelaide, Australia - Amid declining revenues for Bridgestone's Australian subsidiary, minority shareholders forced a vote on the re-appointment of board members at the company's annual meeting. Bridgestone Corp. holds a majority stake in the company and the board won the vote.

Makio Ohashi, executive chairman of Bridgestone Australia told shareholders that profits in 2006 were unlikely to match those of 2005, which were themselves down by 4.5 percent on 2004.

Ohashi said sales revenues in 2005 were Aus$520.4 million (Euro 308.4 million), down by 3 percent on the 2004 figure, despite an increase in average selling prices. He said the decline was due to one OE customer - Mitsubishi Motors Australia Ltd. - stopping all orders to Bridgestone in mid-2005.

Pre-tax consolidated profit for 2005 was Aus$14.9 million, down 4.5 percent on the previous year. Ohashi added that profits in 2006 would be even lower, since raw materials prices were continuing to rise and Bridgestone was unable to recover the full increase through price rises.

Meanwhile, minority shareholder John Spalvins urged shareholders to vote against the re-election of four directors, saying that the board has failed to deliver satisfactory profits, resulting in a falling share price. Spalvins said in an open letter to Bridgestone that in 1997, Bridgestone Australia shares were worth around $3.20 each but were now around $2.65 - a 17 per cent decline. In comparison, the All Ordinaries index on the Australian Stock Exchange had increased more than 100 per cent.

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Download Chairman's statement from Bridgestone Australia (137k .PDF file)

Bridgestone board escapes shake-up The Age (Australia)

Bridgestone board challenged as tyre revenue starts to deflate The Australian (Australia)