Food

Shimano hikes profit view as pandemic brings cycling boom

shimano-hikes-profit-view-as-pandemic-brings-cycling-boom

shimano-hikes-profit-view-as-pandemic-brings-cycling-boom

Shimano is “receiving more orders for parts in all price ranges,” its president says.

TOMOHIRO TAKASA, Nikkei staff writer | Japan

SAKAI, Japan — Bicycle gear maker Shimano has raised its profit and dividend forecasts for 2021 as cycling fans in the U.S. and Europe propel sales growth.

The Japanese company said Tuesday it now expects group net profit to rise 48% to 93.7 billion yen ($855 million), compared with an earlier estimate of a 25% gain to 79.6 billion yen.

While airlines and railways have lost business during the pandemic, the globally recognized maker of wheels, brakes and other equipment for pedal-powered transportation has caught a tailwind.

“The global cycling market has expanded by 40% to 50% since 2019” owing to the effects of the pandemic, President Taizo Shimano said.

“We’re receiving more orders for parts in all price ranges, so we’re increasing production,” he said.

The company now forecasts 2021 sales to grow 32% to 500 billion yen, up 44.5 billion yen from the previous estimate. Of this, bicycle parts are expected to increase by 36% to 405 billion yen.

“We’re seeing a decline in momentum in parts of the North American market, but it will remain strong until 2022,” said President Shimano, an heir to the company’s founding family.

Fishing gear, another key segment, is also expected to see 18% growth to 94.5 billion yen as more people start a new outdoor activity.

The company raised its estimated annual dividend to 235 yen a share, up 80 yen from the previous forecast. Last year’s payout totaled 355 yen, including a commemorative dividend of 200 yen.

For the six-month period ended June 2021 announced on the same day, sales and net profit were 264.6 billion yen and 56 billion yen, up 65% and up 79% on a year-on-year basis, respectively.

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