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Bridgestone in 150b yen share buyback after profit drop
[NEW DELHI] Bridgestone Corp said it will purchase up to 150 billion yen (S$1.844 billion) in the Japanese tiremaker's biggest stock buyback since at least 2000 to improve capital efficiency and boost enterprise value.
The Tokyo-based company will buy back as many as 50 million shares, or 6.4 per cent of stock outstanding, and cancel them in addition to another 20 million in treasury stock, it said in a statement on Friday. The manufacturer's stock gained 0.9 per cent to 4,315 yen before the announcement.
Bridgestone is initiating the share buyback as operating profit fell for the first time in seven years as a stronger yen eroded repatriated profit.
The company is projecting operating profit this year will remain little changed from 2016, with the operating environment continuing to require "careful attention" due to fluctuations in exchange rates and prices of raw materials.
"An ongoing lack of clarity in the global economic situation and international political conditions that remain unstable," it said, without being more specific.
The Americas accounted for about half of Bridgestone's revenue last year, followed by Japan at about 20 per cent.