Fukoku Rubber earnings fall on rising costs, lower sales

Tokyo – Fukoku Rubber has seen its operating profit decline in the first six months of fiscal year ending 31 March 2026, due mainly to rising costs and lower sales.

For the six months to end of September, the Japanese group posted a 24.8% year-on-year decline in operating profit to Yen1.5 billion (€8.3 million), on slightly year-on-year lower sales (0.5%) of Yen44.3 billion, Fukoku reported 5 Nov.

Efforts to improve productivity, streamlining measures, and higher selling prices to reflect higher costs as well as sluggish sales “proved insufficient” to offset the rising cost of raw materials and labour, said Fukoku.

While the Japanese economy moderately recovered, concerns continued over the risks posed by US trade policies and the potential dampening effects of inflation on personal consumption.

The group’s functional parts business, which produces parts such as seals and wiper blades, reported a 4.7% year-on-year growth to Yen20.8 billion, helped by “steady orders.”

In particular, the unit saw an increase in orders for products such as thermally conductive gap fillers.

Segment operating income, however, was down 9.1% to Yen2.17 billion due to the impact of rising raw materials and labour costs, which could not be mitigated by net sales growth and streamlining efforts.

The anti-vibration parts business saw six-month sales decline 4.6% year-over-year to Yen18.6 billion due to slowing orders both domestically and internationally.

Segment operating profit fell 13.3% to Yen1.1 billion yen, as efforts to improve productivity, streamlining measures, and price adjustments did not offset the increases in metal parts and labour costs.

Another rubber-related unit, the hose business, posted an 8.1% increase in sales to Yen2.6 billion due to “steady orders of products for commercial vehicles.”

Segment operating profit rose 160.2% year on year to Yen210 million due to net sales growth and productivity improvement.

On short-term outlook, Fukoku said gradual recovery has continued, supported by improvements in employment and income conditions in Japan.

However, it added, concerns remain over the downside risks to the economy posed by US trade policies and the effects of ongoing inflation on personal consumption, leaving the outlook uncertain.

In the automotive industry, production volumes are expected to continue to recover at “a steady pace,” despite differences from region to region.

However, policy changes and other factors are expected to result in relatively weak demand in the near term.