Fukoku reports 50% rise in operating profit

Tokyo – Fukoku Co. Ltd has reported a significant increase in first-quarter operating profit, helped by pricing and efficiency improvements across segments.

For the three months ended 30 June, consolidated revenue rose 2.8% year-on-year to Yen23.3 billion, on “steady sales” in the ‘functional parts business’, ‘life science business’, and hose business, the group reported 6 Aug.

Operating profit grew 51.4% year-on-year to Yen1,515 million, due mainly to higher sales, productivity improvement and streamlining and price adjustments.

These, Fukoku said, helped offset the impact of higher raw material and labour costs.

According to the Japanese parts supplier, during the three-month period, Japanese economy maintained “a course of moderate recovery” supported by improved employment and income conditions and various government policies.

However, Fukoku said, the economic outlook remains uncertain, due to rising geopolitical risks such as escalating tensions in the Middle East, rising energy and raw material prices driven by exchange rate fluctuations, US trade policies and developments in the Chinese economy.

For the automotive industry, Fukoku said regional trends diverged during the quarter, with production volumes remaining firm in Japan, while in China, signs of slowing growth began to emerge following the previous upward trend.

In addition, despite long-term growth outlook for electric vehicles, Fukoku said the sector was “entering an adjustment phase” due in part to the effects of policy changes.

By segment, Fukoku said its ‘functional parts business’ – maker of heavy-duty industrial rubber parts, weatherstrip and office automation rubber goods – saw sales grow 7.8% year-on-year to Yen11 billion during the quarter.

The group linked the growth to “steady orders from Chinese-affiliated wiper manufacturers, as well as “firm orders” for thermally conductive gap fillers designed for electric vehicles.

The ‘anti-vibration parts’ business recorded a 1.4% year-on-year decline in sales to Yen9.6 billion due to the impact of the change in the closing date of Fukoku India.

Excluding the Yen548-million negative effect of the closure, the segment posted higher year-on-year sales, helped by “steady orders for products for construction machinery and semiconductor manufacturing equipment.”

Fukoku’s hose business reported a 15.5% increase in quarterly sales to Yen1.5 billion on steady orders of products for commercial vehicles.