By Kosaku Narioka
Shimano shares fell sharply Wednesday morning after the Japanese bicycle-parts maker posted a 27% drop in first-half net profit and cut its full-year earnings guidance.
The shares were recently 3.8% lower at 22,725 yen after falling as much as 5.8% earlier.
Shimano said Tuesday after market close that net profit fell to Y50.38 billion ($357.5 million) for the six-month period ended June 30 from Y68.56 billion in the year-earlier period. First-half revenue dropped 13% to Y263.25 billion.
Operating profit from the bicycle-parts business dropped 40% to Y42.09 billion as the segment’s revenue dropped 18% to Y204.99 billion. The company said sales were slow in Europe due to bad weather and were also weak in North America and Japan. Inventory levels in the market remain elevated, it said.
Operating profit from its fishing-equipment business rose 4.5% to Y11.84 billion, as the segment’s revenue climbed 7.0% to Y58.03 billion.
Shimano cut its guidance for 2023, saying a demand recovery is likely to be delayed and that it’s difficult to absorb higher costs of manufacturing.
It now projects that revenue will fall 28% to Y450.00 billion, down from its previous forecast of Y460.00 billion, and that net profit will drop 46% to Y69.00 billion, lower than its previous estimate of Y69.50 billion.
Write to Kosaku Narioka at [email protected]
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