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Sumitomo Rubber ups '02 net profit forecast by 33%

TOKYO, Aug 23 (Reuters) - Japan's third-largest tyremaker, Sumitomo Rubber Industries Ltd , on Friday revised up its group net profit forecast for 2002 by 33 percent on the back of strong exports to the United States and cost cuts.

The revision helped send Sumitomo Rubber's shares up as much as 4.3 percent in early trading.

The Kobe-based tyremaker now expects a group net profit of 8.0 billion yen ($66.8 million) for 2002, which would mark a sharp turnaround from a group net loss of 7.21 billion yen in 2001.

The full-year revision was largely based on a better-than-expected first-half performance.

Sumitomo Rubber also revised up its first-half group net forecast to a profit of 3.1 billion yen from an earlier projection of a loss of one billion yen.

"Tyre sales in the domestic market continued to be tough... but export sales grew, particularly exports to the U.S.," Sumitomo Rubber said in a statement.

"And on top of that, we got a big boost from cost cuts and the maintainance of a weak yen in the first half," said Sumitomo, 10 percent owned by Goodyear Tire & Rubber Co .

The expected first-half results would partially mirror those of Japan's largest tyremaker, Bridgestone Corp , whose earnings in the January to June period received a boost from strong U.S. exports, a weak yen and cost cutting.

But both Bridgestone and Sumitomo Rubber may face a more difficult road in the second half of 2002, due to the potentially export-crimping strengthening of the yen and high rubber prices.

Sumitomo Rubber, which books around 15 percent of its sales through its sporting-goods business, revised up its full-year group sales forecast by 1.1 percent to 450 billion yen, which would mark a 3.6 percent rise over the previous year.

The tyremaker's first-half group sales forecast was revised up by 3.4 percent to 210 billion yen.

The revision was not unexpected, as Sumitomo Rubber in July had sharply revised up its parent-only forecasts for the first half and full year, and said it was likely also to eventually revise its group forecasts as well.

Sumitomo owns a 51 percent stake in Japan's fifth-largest tyremaker, Ohtsu Tire & Rubber Co Ltd .

Ohtsu on Friday revised up its first-half group net profit forecast to 700 million yen from break even, but kept its full-year forecast unchanged.

Shares in Sumitomo were up 2.24 percent at 548 yen at 0107 GMT, while the Nikkei average was up 0.81 percent. ($1=119.79 yen)