Bridgestone's 12% Truck Tyre Price Hike Won't Cover Increased Costs – Analysts
Bridgestone’s decision to impose a drastic 12 per cent increase of North American truck and bus tyre prices in only likely to recoup roughly a fifth of the increased rubber costs the tyre manufacturer has had to pay recent, Deutsche Bank analysts reported.
“In view of the likely penetration rate for the price hikes, we calculate an earnings impact of some 20 billion yen (£150.989 million; 177.816 million euros; US$244.708 million). Based on price increases announced to date, we look for a ¥100bn impact in the 2012/2011 full year,” the analysts wrote in an investors note. Their view is that the company’s price hikes to date are not enough to offset higher raw materials costs. “Assuming a natural rubber price (RSS3) of $5.8/kg, and a naphtha price of $95/bbl, we calculate a cost increase of 200 billion yen from higher raw materials prices,” the bankers explained.
Bridgestone plans to announce results and hold a briefing on 18 February.
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