Tyre maker Bridgestone has reported a 68% plunge in profit for the first half, blaming expenses related to closing a US plant and the surging cost of raw materials, including crude oil and rubber.
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According to The Associated Press, profit for the six months slumped to 32.8bn yen ($US285m) from 101.7bn yen in the first half of 2005.
The report said the profit drop came despite a 13% jump in first half sales to 1.4 trillion yen ($12bn), boosted by healthy sales of trucks and cars in Japan and Europe.
Plant closure costs amounted to 15.8bn yen ($137m) during the period, including 13.6bn yen ($118m) that went into shutting a money-losing factory in Oklahoma City operated by Bridgestone’s US subsidiary, Bridgestone Firestone North American Tyre, AP said.
AP said soaring costs of crude oil and rubber took their toll on Bridgestone earnings while the company said the absence of a Japanese pension-related reimbursement that boosted previous-year earnings was also a factor in the reduced profits.
Bridgestone has lowered its full-year profit forecast to 62bn yen ($539m) from an earlier forecast for 65bn yen ($565m, citing costs for closing a plant in Chile that couldn’t keep up with competition, the news agency said, adding that the revised profit would amount to a 66% slide from the previous year.
Bridgestone kept unchanged its sales forecast at 2.95 trillion yen ($26bn), up 10% from full year 2005, The Associated Press added.
