Sumitomo Rubber Industries (5110) Q2 2024 earnings summary

Executive summary

• Achieved record-high sales revenue of ¥587.0B, business profit of ¥42.3B, operating profit of ¥42.0B, and profit attributable to owners of parent of ¥38.7B for the 2nd quarter of 2024, with business profit margin at 7.2%.

• Profitability was significantly boosted by favorable foreign exchange rates, despite lower tire sales volume and increased labor costs.

• Growth driven by strong overseas replacement tire sales in Europe, original equipment sales in North America, and increased sports segment sales in Japan, North America, and Europe.

• Structural reforms and new product launches, including next-generation all-season tires with ACTIVE TREAD technology, are underway to support future growth.

• The company advanced its Mid-Term Plan, focusing on strengthening its business foundation and expanding high-performance product sales.

Financial highlights

• Sales revenue rose 5% year-over-year to ¥587.0B for Jan–Jun 2024; business profit up 148% to ¥42.3B; operating profit up 150% to ¥42.0B; profit attributable to owners of parent up 373% to ¥38.7B.

• Comprehensive income reached ¥91.6B, up 92.1% from the prior year.

• Basic profit per share was ¥147.25, compared to ¥31.16 in the prior year.

• Cost of sales decreased by ¥14.5B, while SG&A expenses increased by ¥15.2B year-over-year.

• Financial income increased by ¥10.1B, mainly due to foreign exchange gains.

Outlook and guidance

• Full-year 2024 sales revenue forecast at ¥1,200.0B, up 2% year-over-year; business profit forecast at ¥80.0B, up 3%; operating profit at ¥61.0B, down 5%; profit attributable to owners of parent at ¥41.0B, up 11%.

• The forecast was revised upward due to yen depreciation, but risks remain from raw material and labor cost increases.

• Annual dividend forecast maintained at ¥58 per share, with interim and year-end dividends of ¥29 each.

• Tire production capacity and volume expected to remain stable, with overseas share at 63–64%.

• Actual results may differ from forecasts due to uncertainties in global economic conditions.