Sumitomo Rubber revises up earnings forecast on automotive recovery
Lower freight costs and “lull" in rising raw material, energy costs drive significant earnings increase
Hyogo, Japan – Sumitomo Rubber Industries (SRI) has revised up its financial guidance for 2023, on stronger automotive production and an easing of raw material costs.
The Japanese group now expects earnings (business profit) to come in at Yen63 billion for the full-year, up 26% compared to an earlier estimate provided in January.
Full-year revenue is now expected to reach Yen1,180 billion, up by 1% compared to a January estimate of Yen1,170 billion, SRI reported 10 Nov.
The Japanese group linked the upward revision mainly to strengthening car production following the easing of semiconductor shortages and the effect of foreign currency translations.
In addition, a downward trend in the prices of raw materials and the improvement of sales mix, by focusing on “advanced tires and other factors,” are expected to contribute to improved earnings.
The upgraded forecast follows a strong third quarter for SRI, which saw earnings increase to Yen25 billion – from a loss of Yen1.8 billion a year ago – on 7% higher sales of Yen290 billion.
For the first nine months of 2023, SRI saw earnings surge to Yen42 billion, up significantly from Yen12 billion reported for the same period the year before.
Sales for the first nine months of 2023 were up 9% year-on-year at Yen850 billion, SRI reported.