Not so long ago the word ‘inflation’ typically drew thoughts to tyre pressure, at least in our line of work. But the other inflation has made an unwelcome comeback and is eating away at our purchasing power. Over in Turkey, the rate of inflation hit 72% in 2022 and made its presence known in Brisa’s financial results for the year. But against this backdrop of growing Turkish Lira weakness, the tyre maker had a good year.
The Yokohama Rubber Co. Ltd. has reported record sales and earnings in its fiscal 2022 (January to December 2022) figures. Sales revenue increased 28.3 per cent over the previous year, to 860.5 billion yen (£5.338 billion; 6.009 billion euros; US$6.409 billion). Business profit increased 12.8 per cent to 70.1 billion yen (£434.864 million; 489.504 million euros; $522.164 million). Both sales and profit were record figures. However, due to profit from the sale of Yokohama Rubber’s headquarters building in the previous year and other factors operating profit was down 17.7 per cent to 68.9 billion yen.
Tyre-related business profit at Sumitomo Rubber Industries (SRI) stood at 67.9 billion yen in 2016 and was still a respectable 41.4 billion yen in 2021, but last year dropped to 12.3 billion yen (£76.2 million). It’s therefore no surprise that SRI believes it has been investing too much capital in unprofitable businesses, and the company intends to change this.
In spite of lower sales volumes, a combination of “firm pricing discipline” and “fast-growing non-tyre sales” helped Michelin increase its overall sales to €28.6 billion in 2022. The company achieved segment operating income of €3.4 billion, while net income reached €2.0 billion for the year, up 8.9 per cent on 2021.
Goodyear reported net losses of $104 million (£85.81 million; 96.71 million euros) in its fourth-quarter 2022 results. By comparison, the same period of 2021 saw $553 million of income. Meanwhile, net sales grew six per cent to $5.374 billion in the period despite 3 per cent lower unit volumes compared with the same period in 2021.
Nokian Tyres reports that its fourth-quarter 2022 net sales totalled 411.3 million euros, down 19.8 per cent from 512.6 million euros in October–December 2021. Operating profit was 13.5 million euros (Q4 2022: 88.0 million). Despite that, the company’s full-year 2022 net sales grew 3.6 per cent to 1,776.1 million euros (2021: 1,714.1 million euros). However, that wasn’t enough to prevent a full-year 2022 loss of 116.2 million euros (2021: 268.2 million euros profit). Executives put the fourth-quarter declines down to “lower passenger car tyre supply volumes…”, something that is a veiled reference to the fact that the company is wrestling with a serious passenger car tyre production gap.
Apollo Tyres Ltd. maintained its market share within Europe’s passenger car and light truck (PCLT) market in the three months to 31 December 2022 (Q3 FY2023) despite declining approximately 14 per cent year-on-year in this market. The tyre maker primarily attributes this negative growth to high channel inventory, a mild winter and the economic slowdown.
At the end of January, three Chinese tyre companies released their 2022 performance forecasts, which show that Aeolus and Linglong are in profit, but reveal huge losses at Doublestar.
Announcing its 2022 financial results, Hankook Tire & Technology (Hankook Tire) shares that its consolidated global sales reached an “all time high” last year. Sales increased 17.5% to KRW 8,394.2 billion (£5.6 billion, $6.9 billion). Operating profit rose 9.9% YoY, to KRW 705.7 billion (£468.2 million, $576.7 million).
Goodyear Tire & Rubber Company is planning “rationalization and workforce reorganization” actions that would result in a 5 per cent reduction in salaried staff globally, or about 500 positions. According to executives, the move has been prompted by the “challenging industry environment and cost pressure driven by inflation.” However it is also attributed to weaker-than-expected fourth-quarter results:
Ceat Limited, an RPG Group company, reports consolidated revenue of Rs 27.27 billion (£269.9 million) for the three months to 31 December 2022, the third quarter of its financial year. This result represents a year-on-year increase of 13.0 per cent. EBITDA rose 61.8 per cent year-on-year to Rs 23.14 billion (£229.0 million), with an EBITDA margin of 8.5 per cent, up 256 bps compared with the same period of last year. Net profit stood at Rs 348 million (£3.4 million).
Following the news that Continental AG has pre-released fourth-quarter 2020/full-year 2022 sales, adjusted pre-tax profit (EBIT) margin and free-cash-flow figures, financial analysts immediately began sharing their verdict.
Using “initial preliminary and unaudited figures” as a source, Continental Group has published its key financial figures for Q4 and fiscal 2022. These show adjusted free cash flow to be significantly below the target range. The tyre maker and automotive systems company is nevertheless confident of achieving its targeted consolidated sales and adjusted margin.
Halfords Group has reported very strong financial figures that show group revenues amounted to £765.7 million in the first half of 2023. Of this figure, £265.2 million was generated by the Halfords Autocentres business. And what’s more, the latest projections suggest that the services part of the wider Halfords group, within which Autocentres is found, will account for the majority of revenue by 2024. Currently service-related sales represent 42.6 per cent of group revenues in the period and are expected to reach circa 48 per cent of sales on an annualised basis following the acquisition of Lodge Tyre.
At the end of the second quarter ended 30 September 2022, Apollo Tyres Ltd reported double-digit increases in sales and profitability that point to even great performance in the first-half of the company’s current financial year. And the data shows that company’s European operations are at the forefront of leading the company’s strong performance.
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Goodyear
Nokian Tyres
Austin Diste; Unsplash
Goodyear
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Apollo Tyres