TOKYO: Japanese tyremaker Bridgestone said Friday that profits soared in 2010 but expected them to shrink this year due to higher commodity prices and the impact of the strong yen.
Bridgestone, which vies with France's Michelin to be the world's top tyremaker, saw a net profit of 98.9 billion yen ($1.18 billion), a huge rise from a 1.04 billion yen profit in 2009, although the huge jump was partially due to the low base effect.
The worldwide recovery in auto sales, driven by emerging market demand from the likes of China, India and Brazil has bolstered demand for tires.
But it said it expected profits to decline 17 percent in 2011 to 82 billion yen on the negative impact of exchange rate volatility.
It also forecast a 16 percent fall in operating profit to 140 billion yen despite a roughly 11 percent increase in sales.
Sales rose 10 percent in 2010 to 2.86 trillion yen from 2.59 trillion.
The strong yen has made life difficult for Japan's exporters, making their goods more expensive against foreign rivals with relatively cheaper domestic currencies while eroding overseas profits repatriated back home.
Bridgestone has already decided to raise prices for tyre products in Japan from June 1, due to higher prices for natural rubber and other raw materials.
The hike covers such products as passenger and motorcycle tyres with prices rising between eight and 15 percent. The company has already decided to raise prices for trucks and buses from March 1 by an average of seven percent.
The outlook is based on an assumption the dollar will average 84 yen and the euro 110 yen over the year.
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