Fukoku posts higher earnings, sales amid market recovery

Tokyo – Fukoku Co., Ltd has posted higher sales and operating profit for the three months ended 30 June, due to “a moderate recovery” in the Japanese economy.

Operating profit for the first quarter rose 2.1% year-on-year to Yen1 billion on 2.2% higher sales of Yen22.7 billion, Fukoku reported 6 Aug.

Fukoku linked the growth in operating profit to higher sales, price adjustments and streamlining efforts to mitigate high raw material and labour costs.

During the three-month period under review, the Japanese economy “remained on a path of moderate recovery, supported by improvements in employment and income conditions,” said Fukoku.

However, the group said that the outlook continued to be uncertain due to various factors, including the impact of US trade policy on prices and consumer sentiment.

Despite US tariff risks, automotive production “remained firm” during the quarter, although the shift in demand toward electric vehicles “remained weak.”

Fukoku’s functional parts business, which produces products such as seals and wiper blades, reported a
9.1% year-on-year increase in sales to Yen10.3 billion, on “steady orders,” including orders for products such as thermally conductive gap fillers.

Segment income, however, was down 3.2% year-on-year to Yen1.1 billion due to the impact of rising raw materials and labour costs.

The anti-vibration parts business reported a 2.7% decline in sales to Yen9.8 billion due to slowing orders. Segment income rose 3.6% year-on-year to Yen695 million due to cost-cutting measures and productivity improvements.

Fukoku’s hose business posted a strong quarter with sales up 5.9% year-on-year to Yen1.3 billion and segment profit up 84% at Yen108 million.

Fukoku linked the higher sales to “steady orders of products for commercial vehicles”, noting that cost-cutting measures, productivity improvements and price adjustments helped push up profits.

Commenting on the business environment, Fukoku said despite a US-Japan trade deal, tariff negotiations remained unresolved in some other countries where it operates.

“The impact of the tariff measures on the US economy also remains uncertain at this point,” it noted.

“In light of these factors and due to the difficulty of assessing the potential impact of recent US tariffs on our businesses and results, we have excluded such projections from the consolidated earnings forecast for the full year,” it added.