Strong Yen hits sales and earnings at Bridgestone

Tokyo – Bridgestone Corp. has reported an 8-percent fall in operating income, to Yen218.2 billion, on first-half net sales of Yen1,646.5 billion – 11 percent below the prior-year level.

Sales at the group’s Tires Business were 13 percent sales, at Yen1,352.7 billion, while operating income fell 3 percent to Yen198.6 billion, said the half-year report issued 9 Aug.

The declines were a bit less severe at Bridgestone’s Diversified Products segment: sales falling 3 percent to Yen301.0 billion and operating income down 5 percent to Yen19.5 billion.

Regionally, first-half sales fell by 10 percent in Japan to Yen519 billion and 14 percent in North America to Yen822.2 billion.

Sales in ‘EMEA’ rose by 15 percent to Yen 243.9 billion, though that partly reflected the move of Middle East & Africa sales from ‘Other regions’ to the groups ‘European’ results. This change was also a factor in a 27-ppercent fall in ‘Other regions’ sales to Yen3211.8 billion.

In the OE market, PCR demand fell 3 percent in Japan but increased by 4 percent in North America and 5 percent in Europe. Demand for OE products in the TBR sector grew by 3 percent in Japan and 12 percent in Europe but slumped 18 percent in North America.

By contract, replacement PCR and TBR product sales came in level or increased slightly in these three regions during the first six months of the year.

Overall, Bridgestone said the group’s half-year performance reflected the impact of a stronger than expected Yen and lower selling prices due to declines in raw materials prices.

The company reported higher sales of passenger car tires, including steady demand for “strategic” products, but a decline in truck & bus tire sales.

Excluding currency factors, operating income increased with “a good balance between sales volume and quality of business,” Bridgestone’s financial statement added.

Forecasts

For the full year, Bridgestone forecast demand for OE passenger car tires (PCR) to show increases of 5 percent, 4 percent and 2 percent in Europe, North America and Asia respectively, and end the year level in Japan.

Sales are also expected to hold up or increase slightly in the PCR replacement market and in the TBR market – with the notable exception of an 18-percent drop predicted for TBR sales in North America.