Tokai Carbon reports sharp increase in sales, earnings in H1

TOKYO—Tokai Carbon Co. Ltd. has seen operating income increase sharply on the back of strong performance by its carbon black and other core businesses.

For the first six months of the year, operating income rose 30 percent year-over-year to $150 million (Yen 21.7 billion), on sales 14-percent higher at $1.2 billion, Tokai Carbon reported Aug. 8. And earnings (EBITDA) for the group rose 19 percent to just under $277 million.

While total sales came in 10-percent lower than an earlier estimate of $1.4 billion, operating income was up 8.7 percent compared to the $138 million forecast in May.

Tokai Carbon linked the higher earnings and profits largely to "steady growth in major businesses centered on carbon black and an increase in foreign exchange gains."

In the carbon black division, first-half sales were up 15 percent year-on-year to $512 million, while operating income more than doubled to $74 million.

Sales volumes for tires remained at around the same level year-on-year, Tokai Carbon said, noting this was "despite being impacted by production adjustments for some customers."

Higher productivity and the pass-through of environmental investment costs, particularly in North America, helped push up sales and operating income, it added.

The group, meanwhile, improved margins by setting "appropriate selling prices" that reflected environmental investments and raw material cost increases.

Tokai Carbon added that demand for new cars was recovering, though demand for replacement tires, particularly in the trucks/bus segment, was "slow."

While near-term recovery in demand for replacement tires was "uncertain," Tokai Carbon said it sees better medium-term prospects on "tighter a demand-supply balance in (the) U.S. and other markets."