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:
|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.