Sumitomo Rubber reports 40% earnings jump despite ‘sluggish market’

Sumitomo Rubber Industries (SRI) has posted a 40.6% year-on-year surge in second-quarter business profit to Yen39.8 billion, defying what it describes as a sluggish global market. The group’s sales rose 8.3% to Yen620 billion for the quarter ended 30 June, driven primarily by its tires division. Tire sales climbed 9.4% to Yen66.6 billion, while segment earnings jumped nearly 54% to Yen34 billion. Despite flat overall tire volumes compared with the same period last year, SRI highlighted significant growth in Europe following the January launch of Dunlop-brand tire sales there. Market conditions remained weak globally, with geopolitical tensions in the Middle East further dampening demand. In Japan, OE volumes increased year-on-year despite lower overall car production, attributed to securing high market share in new models. Replacement market volumes grew, boosted by strong summer tire and Synchro Weather all-season tire sales. Overseas OE volumes fell below the prior-year level due to stagnant sales of Japanese automakers in China and the impact of the Middle East conflict on markets such as Thailand and Taiwan. Replacement demand was mixed: flat in Asia-Oceania but up significantly in Europe, where Dunlop brand sales began in January. North American volumes declined amid sluggish conditions, while South American volumes suffered from imports from outside the region. SRI’s sports business saw a 3.1% revenue increase to Yen66.6 billion, but business profit fell 7.2% to Yen3.7 billion. The industrial and other products unit reported a 7% drop in business profit to Yen1.9 billion on 2.6% lower sales of Yen18.7 billion, with gains in civil works, marine products, medical rubber products, vibration control dampers, and rubber gloves offset by declines in architectural flooring, rubber parts for office equipment, and sports artificial turf. Raw material costs, particularly for rubber gloves, surged following geopolitical tensions linked to the war in Iran.