Yokohama posts first half sales increase, income drop
Yokohama Rubber Co. Ltd. posted net income of 554 million yen on net sales of 256.6 billion yen for the first half of its 2009 fiscal year ended Sept. 30, 2008. That compares to income of 13 billion yen on sales of 253.3 billion yen for the first half of its fiscal 2008.
Based on the exchange rate on Sept. 30, 105.94 Yokohama recorded income of $5.2 million on sales of $2.4 billion for the first half. It's income-to-sales ratio was 0.2%.
In addition to the 95.7% drop in net income from the same period of the previous year, Yokohama also suffered a 53.7% decline in operating income, from 12.1 billion yen to 5.6 billion yen.
The company lists four conditions that affected operating profitability so adversely: the continuing upward trend in raw material prices; the appreciation of the yen; increases in logistics costs and other selling expenses; and the partial relinquishment of a tax benefit associated with the write-down of unrealized gains on inventories.
Yokohama posted a 2.7% increase in tire sales over the same period of the previous year, from 188.7 billion yen to 193.8 billion yen. It credited the following for contributing to the sales increase:
* increased sales to Japanese automakers;
* business gains in Russia, China, and the Middle East; and
* price increases.
Operating income in the Tire Group declined 64.6%, to 3.2 billion yen.
"The stronger-than-expected appreciation of the yen and the sudden worsening of the global economic outlook have prompted downward revisions in Yokohama's full-year fiscal projections," said the company. "Management now projects that net income will decline 54.9%, to 9.5 billion yen, on a decline of 21.5% in operating income, to 26 billion yen, and an increase of 1% in net sales, to 557.0 billion yen."
The new projection for net income is 26.9% lower than Yokohama projected in May, when it announced its business and financial results for the previous fiscal year. The projection for operating income is unchanged from the earlier projection, and the projection for net sales is 1.4% lower.