SRI tire earnings rise despite tariff headwinds

Kobe, Japan – Sumitomo Rubber Industries (SRI) has reported higher tire business profit (earnings) for 2025 despite slightly lower sales revenue and the impact of US tariffs.

For the year ended 31 Dec 2025, SRI posted sales revenue of Yen1,207 billion (€6.6 billion), broadly flat compared to Yen1,211 billion reported last year, while business profit rose 3% to Yen90.8 billion.

Operating profit increased sharply to Yen82.6 billion from Yen11.2 billion a year earlier, SRI reported 12 Feb.

Within this, the tire business recorded a 5% year-on-year increase in earnings to Yen80 billion, with sales were marginally lower at Yen1,043 billion, compared to Yen1,046 billion last year.

SRI’s sports unit reported a 13% year-on-year decline in earnings to Yen6.8 billion on flat sales of Yen125 billion.

The industrial/other segment saw earnings rise 3% to Yen91 billion on 5% lower sales of Yen38 billion.

Commenting on the results, SRI president and CEO Satoru Yamamoto said the tire business profit trends varied by region.

EMEA recorded a full-year loss but “returned to profitability in second half,” Yamamoto said, adding that the company is now seeing “a path to improved performance” in the region.

In Japan, tire business profit reached Yen35.1 billion, up from Yen30 billion last year, marking what Yamamoto described as “a recovering performance compared with the past three years.”

The Americas also posted a year-on-year increase in profit, despite “headwinds from Trump tariffs,” supported partly by the effect of North American plant closures.

Asia/Oceania, however, saw lower profit due to intensified competition in China.

Breaking down year-on-year factors affecting earnings, Yamamoto said raw materials were “essentially flat,” as higher natural rubber prices in the first half eased in the second.

Pricing contributed a positive Yen25.3 billion, reflecting price increases in Japan, the Americas and Europe.

However, volume and mix were a negative Yen25.3 billion, reflecting a Yen9.1 billion impact of US tariffs and Yen4.6 billion in unrealised profit effects across Europe, North America and other regions.

Direct costs rose Yen4.2 billion, partly due to higher labour costs at the group’s operations in Turkey, while fixed costs improved by Yen7.0 billion, largely reflecting the impact of North American plant closures.

SRI noted that at Yen90.8 billion, its full-year earnings fell short of the previously stated Yen95 billion target.

Among other factors, local winter tire sales in Japan contributed to the shortfall, as sales were affected by an imbalance between ordered and available sizes.

While early snowfall drove strong orders, SRI said it was “unable to ship by year-end” in some cases, leading to cancellations and backorders.

Changes in trading terms with “a major customer in North American” led to inventory adjustments, reducing profit by around Yen0.9 billion, Yamamoto noting that the issue would not have an impact on the current fiscal year.

Another contributing factor, SRI said, was higher inventory volumes and yen depreciation which resulted in unrealised profit on tires of about Yen2.3 billion.

“We expected to land at a level comparable to the published figure, but we fell short mainly due to these three points,” said Yamamoto.

Addressing US tariffs, Yamamoto said SRI offset a Yen13 billion tariff impact in 2025 as planned through price pass-through and cost reductions.

For 2026, the tariff impact is expected to widen to Yen28.8 billion.

“As in 2025, we will surely counter the tariffs’ impact through price pass-through and reductions in costs and expenses,” he said, adding that further support would come from “total cost reduction activities under Project Ark.” (ERJ report)

For 2026, SRI forecasts sales revenue of Yen1.32 trillion, up 9% compared to 2025, with earnings set to grow 23% to Yen112 billion.

According to Yamamoto, the growth would be driven by expansion of the Dunlop brand, higher sales of Synchro Weather winter tires in Japan and increased North American sales of the Wildpeak series, alongside an improved premium tire mix.