Bridgestone: Higher sales, earnings in Jan-Sept 2021

Bridgestone Corporation reports revenues of 833.0 billion yen (£5.4 billion) in Q3 2021, a 12 per cent increase on the third quarter result a year earlier. Adjusted operating profit is up 54 per cent, to 101.7 billion yen (£644.4 million), with the margin increasing 3.3 percentage points, to 12.2 per cent. Profit attributable to owners of parent amounted to 70.5 billion yen (£460.6 million).

Revenue for the first nine months of 2021 stands at 2,401.8 billion yen (£15.7 billion), a 20 per cent improvement on the revenue for the same period in 2020. At 277.9 billion yen (£1.8 billion), adjusted operating profit is up 168 per cent year-on-year, and the margin has increased by 6.4 percentage points, to 11.6 per cent. Year-to-date profit attributable to owners of parent is 422.8 billion yen (£2.8 billion).

Tyre sales exceed last year, lag behind 2019

Tyre sales in January to September 2021 have outstripped those in the first nine months of last year in all sectors and regions, but are generally lower than sales in January to September 2019.

Fiscal 2021 forecast

Bridgestone anticipates that natural rubber and crude oil prices will “remain at a high level” throughout the rest of this year.

In regards to tyre demand, it expects original tyre demand (both passenger/light commercial and truck) to be “significantly lower” than the previous forecast in August due to the semiconductor shortage’s continued impact. Replacement market demand in Europe, the US and Japan should remain at roughly the same levels forecast in August, but Bridgestone now expects a decline in demand in Asia due to the impact of Covid-19.

In Q4 2021, Bridgestone expects to be “strongly affected” by rising costs of not only raw materials but also ocean freight and energy costs. Furthermore, it anticipates that profitability will be squeezed by rising labour costs. The solution: “By continuing to focus on selling price-mix improvement and expense/cost structure reformation, we will minimise the unfavourable impacts and aim to achieve the full-year guidance.”