Fukoku reports profit growth despite cost pressures

Tokyo – Fukoku Co., Ltd has posted higher full-year profits for the fiscal year ended 31 March, supported by improved automotive production volumes and internal efficiency efforts.

Consolidated net sales rose 0.9% year-on-year to Yen89.6 billion (€550 million) while operating profit grew 29.5% to Yen4.7 billion, despite cost pressures such as rising raw material and labour costs.

Profits were also impacted by the booking of an allowance for 'doubtful accounts and extraordinary investigation costs related to misconduct at its subsidiary Shanghai Fukoku Rubber & Plastics Industry Co., Ltd.'

In its full-year financial results published last month, Fukoku said its earnings benefited from a recovery in global auto production and the ongoing measures to streamline operations and improve organisational efficiency.

However, it cited continued risks including inflation, geopolitical instability, and a sluggish Chinese economy as factors clouding the outlook.

Fukoku’s functional parts business, which produces products such as seals and wiper blades, reported a 5.5% year-on-year increase in sales to Yen41 billion, supported by steady orders and favourable exchange rates.

Segment income increased 15.3% to Yen5 billion, driven by streamlining and price revisions.

The anti-vibration parts business saw net sales grow to Yen38 billion, up 1.1% compared to the year before, while segment income rose 33.9% to Yen2.8 billion, also reflecting efficiency gains and price adjustments to counter higher input costs.

The hose business, meanwhile, posted an 11.0% year-on-year decline in sales to Yen4.8 billion, mainly due to weaker demand in Southeast Asia.

However, segment income increased 8.1% to Yen205 million, supported by cost control and price increases.

Fukoku noted that income taxes were also incurred in connection with the misconduct case at the Shanghai subsidiary's anti-vibration parts division.