By Denna Bowman
Bridgestone tyres have revised their financial projections for the first half of 2009 downwards, due largely to the economic crisis.
And the Japanese tyres manufacturers have also exercised caution in an uncertain market by announcing they are putting off revisions to their full-year projections.
With the first half of the year projections already dropping, Bridgestone said: “We are continuing to review the rapidly changing operating environment, the global economy and the impact these factors may have on our results.
“Therefore, we plan to update the Company’s full year projections at the time the Company’s consolidated results for the first half of the fiscal year are announced.”
In February they published a projected drop in sales from 3,234,405 million yen in 2008 to 2,530,000 yen for the current year.
While projected sales for the first half of the year are marginally up, the operating income and ordinary income look set to fall.
According to Bridgestone the reasons for the revision are: “Due mainly to a continuing decrease in unit sales caused by the global recession and an increase in unabsorbed fixed expenses due to reduced production levels, as well as the impact of foreign currency exchange losses, the Company anticipates its half year operating income and ordinary income will fall below the previous financial projection.
“Further, due to the effect of factors such as the current unavailability of the recognition of the deferred tax benefit relating to the elimination of unrealised gains on inventories, we now forecast that net income will also fall below the previous projection.
“The Bridgestone Group’s operating environment is currently characterised by a continuing lack of demand for new vehicles and slumping demand for replacement tyres, particularly tyres for trucks and buses.”