Yokohama Rubber Co. Ltd. posted net income of 18.3 billion yen on net sales of 443.7 billion yen for the first three quarters of its fiscal year ended Sept. 30, 2015. That compares to income of 24.9 billion yen on sales of 429.8 billion yen for the same period last year.
Based on the exchange rate on Sept. 30, 2015, Yokohama recorded net income of $152.3 million on net sales of $3.7 billion for the first quarters of this year. The company's income-to-sales ratio was 4.1%.
Operating income decreased 4.4%, from close to 31.9 billion yen to 30.4 billion yen.
Business expanded in Yokohama’s tire segment, as overseas sales gains offset sluggish sales in Japan.
Yokohama’s nine-month sales in the tire segment increased 3.3% over the same period of the previous year, to 348.8 billion yen ($2.9 billion), and operating income declined 10.0%, to 22.3 billion yen ($185.9 million). The downturn in operating profitability, which occurred despite declining prices for raw materials and the weakening of the yen, resulted from escalating price competition.
In Japan, Yokohama’s original equipment business declined "on account of a continuing downturn in Japanese vehicle production." Yokohama registered declines in yen value and in unit volume, meanwhile, in the Japanese replacement market. Those declines reflected the aftereffects of:
* the April 2014 hike in Japan’s national sales tax;
* lighter-than-usual snowfall in the Tokyo region, which diminished demand for studless snow tires; and
* escalating price competition.
Leading Yokohama’s overseas sales growth were robust growth in North America and expanding sales volume in China and Russia.
Escalating competition in the tire segment has resulted in a revision of the fiscal projections that Yokohama announced in August. The company now projects net sales of 648 billion yen, up 3.6%; operating income of 55 billion yen, down 6.9%; and net income of 33 billion yen, down 18.5%.
Yokohama paid an interim dividend of 13 yen per share, and management proposes to pay a year-end dividend of 26 yen per share. The company carried out a one-for-two share merger effective July 1, 2015. Yokohama’s proposed aggregate dividend would be in accordance with the company’s earlier projection, adjusted for the share merger.
