SRI: Lower full-year forecast despite profit bounceback

Although Sumitomo Rubber Industries’ (SRI) sales revenues and particularly profit for the first nine months of 2021 were healthily above those achieved a year earlier, the Japanese firm has downwardly revised its sales and profit forecast for full-year 2021.

Sales revenues rose 21.6 per cent year-on-year between January and September 2021, to 657,019 million yen (£4.3 billion). Business profit was, at 32,071 million yen (£209.5 million), 306.2 per cent higher, and operating profit was up 358.2 per cent, to 29,861 million yen (£195.1 million). SRI achieved a profit attributable to owners of parent amounting to 20,726 million yen (£135.4 million), contrasting with the 6,793-million-yen loss a year earlier.

Sales revenue in SRI’s tyre business was 551,895 million yen (£3.6 billion), 19.7 per cent higher than in the same period of last year. Business profit was 23,297 million yen (£152.2 million), a 202.1 per cent year-on-year increase. Despite the impact of the semiconductor shortage, original equipment sales revenues both in the domestic Japanese and overseas markets were higher year-on-year than those in the first nine months of 2020, due to a drop in sales linked to Covid-19 in the prior-year period.

SRI increased its replacement market sales revenues year-on-year in Japan, but its fortunes in other markets were mixed. Sales increased in the Asia and Oceania region, mainly in China, where the economy showed some recovery, and the company sold more units in Europe and Africa thanks to its efforts to expand sales amid the recovering market conditions. Sell-out was strong in the Americas, particularly in North America, however, the volume of imports was restricted as a result of the shipping container situation, and business was greatly affected by soaring transportation costs.

Revised full-year revenues

To reflect changes in the business environment such as the recent rise in raw material prices and soaring marine transport costs, SRI has made the following revisions to its full-year financial results forecast.