Yokohama: six-month income drops as sales rise
Yokohama Rubber Co. Ltd. recorded net income of 294 million yen on net sales of 258.2 billion yen for the first six months of fiscal 2011 ended Sept. 30. That compares to income of 1.2 billion yen on sales of 238.3 billion yen for the same period last year.
Based on the exchange rate on Sept. 30, 2011, Yokohama posted net income of $3.7 million on net sales of more than $3.3 billion from April 1 through Sept. 30. Net income was down in part because during this period, the company recorded a nonrecurring loss in connection with severance payments at a subsidiary.
(Yokohama will change its fiscal year in 2011 to a January-December period. That will result in a one-time-only nine-month fiscal period from April 1 to Dec. 31, 2011.)
Yokohama says the 8.4% growth in sales "resulted primarily from a surge in tire business, led by strong sales in Japan's replacement market."
Operating income declined 8.3% from the same period of the previous year, to 7.6 billion yen. The decrease was caused by the following, according to the company:
* rising raw material costs;
* the appreciation of the yen; and
* an increase in selling, general and administrative expenses, according to the company.
The figure for operating income was 26.7% higher, however, than Yokohama's earlier projection of 6 billion yen. Yokohama's higher-than-projected operating profitability reflected "increases in selling prices for products and progress in trimming costs."
Yokohama's tire operations were up 10.7% in sales (to 204.7 billion yen) and down 2% in operating income (to 6 billion yen). Strong replacement tire sales gains in Japan reflected growth in the used-vehicle market.
Those gains more than offset a sales decline in original equipment tires, which reflected the aftereffects of the Great East Japan Earthquake. Yokohama also posted sales gains in tires overseas, led by growth in Asia and in Europe.
For fiscal 2011, Yokohama projects net income of 8.5 billion yen, net sales of 460 billion yen, and operating income of 21 billion yen.
Click here for Yokohama's first-quarter results.