Tire manufacturer Bridgestone Corp. released a revised earnings outlook Wednesday that includes the impact of a fire at its Tochigi factory earlier this month, lowering net and pretax profit forecasts for the year ending Dec. 31.
Bridgestone now expects a group net profit of 78 billion yen, down from the 80 billion yen it projected in August. The net profit forecast is based on the assumption that fire insurance arrangements are reflected in the full-year financial statement, Bridgestone said.
The company also lowered its 2003 pretax profit forecast to 140 billion yen from 145 billion yen on sales of 2.28 trillion yen.
The fire broke out Sept. 8 at Bridgestone’s factory in Kuroiso, Tochigi Prefecture. It destroyed the facility for mixing chemicals and synthetic rubber powder — the first stage of producing tires — and destroyed 165,000 tires, most of them studless tires for cars. The plant had 400,000 tires in storage at the time of the fire.
The company’s sales estimate, however, was left unchanged because strong business performances in overseas markets in July and August have helped offset the adverse effects of the fire, Bridgestone said.
Bridgestone estimates direct damage from the fire at about 3 billion yen on a book-value basis, including 1.3 billion yen on facilities and buildings, 1 billion yen on inventory assets like raw materials and products, and 700 million yen for clearance work.
Including the direct damage, the company expects losses from the fire to total 40 billion yen, Bridgestone President Shigeo Watanabe told a news conference.
The figure includes 22 billion yen in profit lost during suspended operations and 10 billion yen to rebuild damaged facilities, Watanabe said. Net losses after receiving 4 billion yen in insurance money will total 36 billion yen, he said.
For next year, the company expects the business performance of its group to be affected adversely to the tune of 20 billion yen in sales, 14 billion yen in pretax profit and 8 billion yen in net profit. These figures are based on Bridgestone’s plan for restoring the Tochigi factory.
The outlook revision followed Saturday’s resumption of operations undamaged by the fire, which was brought under control 46 hours after it began.
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