KOBE, Japan—Sumitomo Rubber Industries Ltd. reported double-digit increases in operating and net income for the six months ended June 30 on 9.5 percent higher sales, which benefited from moderate growth in China and gradual recoveries in Europe and North America.
Operating income jumped 18 percent to $342.4 million, while net income was up 41.1 percent to $213.1 million. Sales rose to $3.69 billion.
Sumitomo did not elaborate on the reasons for the earnings improvements other than to say natural rubber prices remained low and that it undertook various measures in the pursuit of business growth and enhanced profitability.
SRI said the global economy continued to show a moderate recovery trend, with gradual recoveries in the U.S. and European economies and steady economic growth in emerging countries in general, with regional weakness in some areas such as the ASEAN countries and India.
The Japanese economy showed a continuing moderate recovery, despite a reactionary decline in demand from the temporary rise in demand accompanying the increase in the consumption tax rate that occurred in April 2014.
SRI's tire business reported 19.9 percent higher operating income of $308.1 million on 10.5 percent better sales of $3.21 billion, or an operating ratio of 9.6 percent.
SRI's domestic replacement and original equipment market sales exceeded the level of the same period of fiscal 2013 for a variety of reasons, including rising demand for the firm's fuel-efficient tire lines.
Overseas, replacement sales were up on higher volumes in each market where SRI is active, aided by the depreciating yen and despite intensifying price competition, the firm said. Overseas OE sales also were up, due principally to significant growth in sales in the Chinese market.
Sumitomo did not provide geographical breakdowns or an outlook for the rest of fiscal 2014.