Sumitomo Rubber returns to profit as tire business grows

Kobe, Japan – Sumitom Rubber Industries (SRI) returned to profit over first six months of the year, helped by a recovery in demand and despit ongoing challenges posed by Covid-19 and materials shortage.

Group sales increased 29.4% year-on-year to Yen440 billion (€3.4 billion) during the first half, as operating profit reached Yen28 billion, up from an operating loss of Yen 3 billion last year, SRI reported 6 Aug. Profit (attributable to owners of parent) stood at Yen20 billion, up from a loss of Yen9 billion in the first six months of 2020. 

The grou's tire unit saw business profit rise to Yen23 billion, from a loss of Yen895 million last year, on 27% higher sales of Yen370 billion.

SRI linked the growth to higher sales domestically and globally compard to the low base of 2020.

The increase, it said, was achieved despite the decrease in car production as a result of semiconductors’ shortage.

The Japanese group said both OE and replacement tire sales improved in Japan and overseas, with Asia, particlarly China, seeing a strong recovery in the replacement market.

Replacement tire sales in the Americas region were also strong, particuarly in the SUV segment, despite the delayed arrival of imports due to the shortage of shipping containers.

SRI’s sports business, which among other products manfactures golf, tennis and wellness goods, reported a 72% rise in sales to Yen51 billion. Business profit was Yen5.5 billion, up from loss of  Yen3 billion last year. 

In the golf goods market, major markets showed a reversal from the Covid slowdown, and sales improved particularly in North America and South Korea, SRI said.

Similarly, in the tennis goods markets, sales revenue exceeded the prior year's level.

SRI’s industrial products unit, however, saw a decline in sales and profits for the period as large-scale projects for infrastructure-based products decreased.

Sales revenue in the unit declined marginally to Yen19 billion, while business profit fell 27% to Yen 1 billion. 

Here, SRI said orders received for vibration control dampers declined, while sales of sanitary rubber gloves and precision rubber parts for medical use increased.