Sumitomo Rubber points to recovery trends as cost pressures ease
17 Nov 2023
Japanese group's Tire business delivers a more than eight-fold increase in earnings for first nine months
Tokyo - Sumitomo Rubber Industries is seeing 'continuing recovery' in the global trading environment despite high levels of inflation in certain regions and drastic interest rate hikes.
Commenting on its business performance for the first nine months of 2023, SRI noted a “significant reduction” in freight costs that soared last year, and a “lull in the soaring raw material prices and energy costs.”
Over the first three quarters, the Japanese group’s ‘tire business’ reported a 9% year-on-year increase in revenue to Yen720 billion (€4,404 million), while earnings jumped 835% to Yen31.8 billion.
In the domestic OE market, SRI said recent sales exceeded last year’s levels, mainly due to improved automotive production following a global semiconductors shortages.
In the domestic replacement market, revenue declined compared to last year due to 'increased winter tire prices and market stagnation'.
In the overseas OE segment, the tire maker's sales fell slightly below the level of last year, particularly in China.
The overseas replacement market remained “at a low level”, due to weakness in Asia and Oceania and despite higher sales in China, added SRI.
In Europe, it noted, sales volume was down year-on-year on ‘sluggish demand’ for winter tires as well as a general slowdown in tire demand, linked in part to inflation.
North America volumes declined overall but saw an increase in sales of flagship Falken tires, SRI adding that South America sales were on par with last year.
At SRI's non-tire-rubber ‘sports business’ revenue was up 8.2% year-on-year for the nine-month period at Yen97 billion, while earnings rose 7.8% to Yen8.9 billion.
Sales of both 'golf goods' and 'tennis goods' improved during the period, due in part of overseas demand and positive forex effects.
Overall, SRI's ‘industrial and other products business’ reported strong growth for the first three quarters, with earnings up 117% at Yen1.2 billion, on 8.4% higher sales of Yen32.8 billion.
While sales of disposable rubber gloves and rubber parts for office equipment declined in Japan, orders for medical rubber parts, infrastructure products, and other products increased.