TOKYO (Aug. 26, 2004) — Sumitomo Rubber Industries Ltd. reported higher operating earnings and sales in the first half and announced $45.5 million in additional investments for capacity expansions in Japan, China and Indonesia.
For the six months, Sumitomo Rubber's operating earnings jumped 36 percent to $160 million while sales advanced 3.8 percent to $2 billion. Net earnings slipped 6.6 percent to $41.1 million as restructuring and pension-related costs took their toll.
Despite the lower first half net earnings, Sumitomo raised its fiscal 2004 profits and sales forecasts by 22.7 and 4.4 percent, respectively, to $123 million and $4.3 billion. The earnings ratio would rise about half a percentage point to 2.9 percent.
For the six-month period, Sumitomo said its sales in Japan picked up, helping to lift its operating profit for the region by 20 percent. Sales in North America, Europe and Asia (outside Japan) all topped year-earlier levels, the company said, with revenues from North America—where the firm sells both Sumitomo- and Falken-brand tires—climbing 8.2 percent to more than $200 million.
Tire division sales and operating earnings were up 5.7 and 2.5 percent, respectively, to $1.48 billion and $93.6 million.
The $45.5 million in capital spending will go toward expanding capacity at six factories in the targeted countries by 12 percent, Sumitomo said. The additional sum—split 60/40 between Japan and China/Indonesia—is on top of nearly $300 million the company had budgeted for the 2004-2006 period to modernize and expand its Asian factories.