Yokohama Rubber Co. Ltd. posted a loss of 258 million yen (approximately $2.4 million) during the first quarter of 2020 – after sales dropped by 13.6% due to COVID-19. Operating profit nearly vanished on a decline of 90.4%.

The tiremaker says “the massive business disruption” caused by COVID-19 will require revisions in its full-year projections that were issued in February. But it’s too soon to make those new projections.

In its release of its latest financials, the company said, “Several measures are under way at Yokohama to maintain a sound financial position in the face of the COVID-19 challenge. Those measures include fortifying short-term liquidity through optimal fund raising, paring cash expenditures by deferring capital spending and trimming costs, and reducing compensation for directors, officers, associate officers, and managers.”

Here's a look at a few key figures:

Note: All figures in yen
  1Q 2020 1Q 2019
Sales 129.1 billion 149.5 billion
Profit (loss) (258 million) 9.1 billion
Operating profit 1.2 billion 12.9 billion
     
     
Sales by segment    
Tires 87.4 billion 100.1 billion
Hoses/Belts Etc. 924 million 1.7 billion
Alliance Tire Group 1.8 billion 2.4 billion

 

 

 

 

 

Yokohama says in its tires segment, both sales revenue and business profit dropped.

“The downturn in business profit reflected a decline in unit sales volume, an increase in production costs associated with reduced production volume, and inventory-adjustment costs occasioned by a tire recall in North America.”

The OE business declined in Japan as well as overseas, and the replacement tire business was “generally sluggish” overseas, in addition to low winter tire sales in Japan due to warmer-than-usual weather.

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