Yokohama Rubber Co. Ltd. posted net income of $35 billion yen on net sales of 601.6 billion yen for its fiscal year ended Dec. 31, 2013. Operating income totaled 56.6 billion yen.
Based on the average exchange rate for 2013, Yokohama recorded net income of $357 million on net sales of $6.1 billion for fiscal 2012. Its income-to-sales ratio was 5.8%.
It is the second consecutive year for Yokohama to achieve record net sales, operating income and net income. The company says the robust sales and earnings performance reflected:
* recovery in tire business in North America and China;
* strong sales of winter tires in Japan; and
* strong sales of high-pressure hoses, industrial materials, and aircraft fixtures and components.
Yokohama says earnings also benefited from a decline in raw material costs and from the weakening of the yen against the U.S. dollar.
Net income increased 7.3%, operating income was up 14% and net sales improved 7.5%.
In Yokohama’s tire operations, operating income increased 6.1%, to 46.0 billion yen, and sales increased 7.9%, to 479.5 billion yen. In overseas business, the recovery in sales volume in North America and in China offset the adverse effects of slumping demand in Russia and elsewhere in Europe and escalating price competition worldwide. Yokohama posted overall sales growth in Japan, meanwhile, bolstered by gains in original equipment tires and in replacement tires.
The Japanese sales gain in original equipment tires occurred despite a decline in unit volume attributable to declining vehicle production, according to the company. It reflected vigorous demand for low-fuel-consumption vehicles, a sector that Yokohama serves with a large range of tire sizes, and Yokohama's success in winning fitments on additional vehicle models.
The company says prices softened in Japanese market for replacement tires. Yokohama posted strong sales of summer tires, however, and recorded record unit volume in winter tires.
In fiscal 2014, Yokohama's projections call for another year of record sales and earnings. The company projects that net income will reach 37.5 billion yen on operating income of 63.0 billion yen and net sales of 647.0 billion yen.
Management abides by its intention, announced in August 2013, to increase the annual dividend 2 yen, to 22 yen. That would comprise the interim dividend of 10 yen, up from 8 yen in 2012, and a proposed year-end dividend of 12 yen, the same as in 2012.