Financial Capital

Financial Capital and Financial Position

Sound financial capital is a key management resource that supports sustainable growth. The ratio of equity attributable to owners of parent, which represents the shareholders’ equity ratio, was 44.6% at the end of fiscal 2022. The rating provided by Japan Credit Rating Agency, Ltd. was “A+” as of March 23, 2023.

Looking ahead, we intend to continuously execute capital expenditure to facilitate our shift in focus toward the production of advanced products in the Tire Business. In addition, we aim to simultaneously secure corporate growth, a sufficient level of liquidity and a more robust financial position. With this in mind, we have set a financial target of reducing the D/E ratio to 0.6 times or less by the end of fiscal 2027 under the Midterm Plan announced on February 14, 2023.

Financial Position

Total assets as of the end of fiscal 2022 amounted to ¥1,225.2 billion, an increase of ¥139.0 billion from the end of the previous fiscal year. Current assets increased ¥90.8 billion due mainly to an increase in inventories. Noncurrent assets rose ¥48.7 billion, reflecting the purchase of property, plant and equipment, foreign exchange effects and other factors.

Total liabilities as of the end of fiscal 2022 amounted to ¥661.3 billion, an increase of ¥88.7 billion from the end of fiscal 2021.Interest-bearing debt increased ¥76.0 billion to ¥372.8 billion.

Total equity as of the end of fiscal 2022 stood at ¥563.9 billion, an increase of ¥50.3 billion from the end of fiscal 2021. Of this, total equity attributable to owners of the parent was ¥546.2 billion, an increase of ¥44.7 billion. As a result, the ratio of equity attributable to owners of the parent came to 44.6%, while total equity attributable to owners of the parent per share amounted to ¥2,076.74.

Total Assets / Total Net Assets and Total Equity

Policy on Returns to Shareholders

The Sumitomo Rubber Group aims to constantly improve its business and thereby maximize the volume of positive cash flows from operations in order to raise its stock price. We believe that such improvement is the most important form of returns to shareholders.

To this end, we allocate cash inflows from these endeavors to capital expenditures and R&D. Also, we intend to maintain a robust and stable stream of cash dividends over the long term while comprehensively reviewing our situation with respect to retained earnings, etc. At present, we have no plan to repurchase treasury stock for the purpose of shareholder returns.

In addition, although this is not necessarily a commitment set in stone, we do tell investors at our regular financial announcements that we are aiming for a dividend payout ratio of at least 40%. Our group has always endeavored to uphold high standards when it comes to paying out steady dividends over the long term, and we have no intention of changing our thinking on investor returns in the future.

For details on our Policy on Returns to Shareholders, please also click on the following link.

A Message from the Executive Director in Charge of Finance