Bridgestone H1 Results Show Lower Profits

Bridgestone Corporation has released details of its consolidated business and financial results for the period January 1 to June 30, 2008, the first half of the current fiscal year. Overall net sales of 1,641.1 billion yen (£7.70 billion) were recorded during the six-month period, an increase of two per cent over the previous year. Operating income, at 83.6 billion yen (£392 million) showed an 18 per cent drop on the first half 2007 figures, and net income of 37.2 billion yen (£174.47 million) is 30 per cent down on the previous year’s result.

Reflecting upon the muted figures, Bridgestone’s official comment was: “A defining trend of the business environment in the first half was the persistent upward movement in the cost of raw materials and other manufacturing components, combined with rising energy costs. There were signs of a slowdown in economic growth in Japan, particularly evidenced by weakening personal consumption. Overseas, the economy slowed in the United States due to a decrease in housing starts and stagnation in personal consumption, while there were signs of a slowdown in the European economy. Strong economic growth continued in China, and other Asian economies expanded steadily.”

Sales for the company’s tyre segment were 1,327.6 billion yen (£6.23 billion), an increase of two per cent. This healthy result was counterbalanced by operating income of 60.9 billion yen (£285.63 million), a 19 per cent decrease. Bridgestone attributed this lower figure to increased raw material costs. The company added that it has worked to maximise its sales momentum by “introducing appealing new products worldwide, while at the same time improving and expanding strategic production sites around the world.”

In Japan, total unit sales of tyres remained on par with those in the previous first half. In the Americas, although unit sales of passenger car and light truck tyres in the North American tyre business decreased significantly in the original equipment sector relative to the previous first half due to a decline in automobile production, unit sales in the replacement sector were described by Bridgestone as ‘brisk’, exceeding those in the previous first half. Unit sales of strategic products, specifically including UHP tyres, increased considerably over the previous first half. Unit sales of truck and bus tyres decreased markedly year-over-year primarily due to a decline in sales in the original equipment sector. In Europe, unit sales of passenger car and light truck tyres remained on par with the previous first half, while unit sales of strategic products, led by run-flat and UHP tyres, grew considerably over the previous first half. Unit sales of truck and bus tyres increased steadily over the previous first half. In the specialty tyres business, unit sales of large and ultra-large OTR radial tyres greatly exceeded the previous first half resulting from continued strong demand.