Sumitomo Rubber Industries (5110) Q1 2025 earnings summary

Executive summary

• Sales revenue for Q1 2025 was ¥287,780 million, with business profit at ¥14,132 million and operating profit at ¥12,318 million; profit attributable to owners was ¥3,561 million.

• Tire business sales revenue reached a record high, but overall tire sales volumes declined due to inflation, market stagnation, and discontinuation of low-profit products.

• Comprehensive income turned negative at ¥(18,573) million, reflecting significant currency translation losses.

• Structural reforms and premiumization initiatives advanced, including acquisition of DUNLOP trademark rights in key regions and announcement of a long-term strategy to 2035.

Financial highlights

• Q1 2025 sales revenue decreased 1.2% year-over-year; business profit dropped 39%, operating profit fell 40.5%, and net profit declined 85.7%.

• Gross margin and business profit margin were 4.9% (down from 8.0% in Q1 2024).

• Basic profit per share dropped to ¥13.54 from ¥94.45 YoY.

• Cash flows from operating activities were ¥9,448 million, with free cash flow at ¥(4,100) million for Q1 2025.

• Cash and cash equivalents at period end: ¥87,035 million, up from ¥82,574 million YoY.

Outlook and guidance

• Full-year 2025 sales revenue forecast at ¥1,220,000 million, business profit at ¥95,000 million, and net profit at ¥45,000 million, all up significantly year-over-year.

• Interim and year-end dividends forecast at ¥35 per share each, totaling ¥70 per share for 2025.

• Tire sales volume expected to decrease, but profit impact to be mitigated by price pass-through and cost controls; premium tire composition ratio forecast to rise.

• Full-year basic profit per share forecast at ¥171.08.