KOBE, Japan—Sumitomo Rubber Industries Ltd., citing unexpectedly effective cost-cutting efforts last year, reported a 10.9-percent increase in pre-tax profits for 1999, to $158.3 million. Net income, however, slid 2.1 percent, to $43.3 million, as the company booked an extraordinary loss to cover shortfalls in its pension and retirement funds.
Sumitomo, which sold majority ownership of its tire activities in North America and Europe to Goodyear last year, said it expects comparable group pre-tax profits in 2000 to rise 73 percent as it continues its cost-cutting efforts.
The company also said it used most of the $927 million it received from Goodyear in the deal to cut its debt by nearly a third. Over the coming five years, Sumitomo plans to trim debt another 20 percent.
Sumitomo's sales fell 22.1 percent, to $4.48 billion, reflecting the loss of sales by the North American and European units for the final four months of the year. Sales in North America dropped 41.1 percent to $489.6 million, while business in Europe was off 38 percent to $1.49 billion.
The company's reported sales of tires were down 25.1 percent to $3.41 billion.
The alliance with Goodyear resulted in a 57-percent drop in group payroll, which contributed to a reduction in costs of more than 8 percent, the company said.
Capital expenditures slid 12.4 percent to $347.8 million.