NOK seals unit reports nearly 70% drop in operating income

TOKYO—NOK Corp.'s Seals business has posted a 68.1-percent year-on-year decline in operating income, to $22.8 million (3.161 billion Yen) on first-quarter revenues, down 3.6 percent to $583.7 million.

Over the three months to June 30, sales of automotive sealing products declined largely due to vehicle and related production cuts, the Tokyo group reported Aug. 2.

The negative impact, it noted, offset gains made from foreign exchange movements, as well as the pass-through of "soaring" raw materials costs to selling prices.

Sales to manufacturers of general industrial machinery declined on COVID-19 lockdowns in China, among other factors. These impacts offset "brisk domestic demand" from manufacturers of construction machinery, machine tools and robots.

Meanwhile, NOK linked the earnings decline at its sales unit to "soaring raw materials costs, higher expenses and the effect of decreased sales."

Among other markets, NOK holds a 70-percent share in Japan and 50 percent globally of the market for oil seals—used for the containment of oil in a wide range of equipment and machinery.