Toyo ups sales 4%, but posts $33.8 million loss
Toyo Tire & Rubber Co. Ltd. posted a net loss of more than 4.1 billion yen on net sales of 194.4 billion yen for the first half ended June 30, 2015. That compares to a net profit of more than 15.2 billion yen on net sales of 187.3 billion yen for the same period in fiscal 2014.
Based on the exchange rate on June 30, 2015, Toyo recorded a loss of $33.8 million on sales of nearly $1.6 billion for 1H 2015.
Operating income for the period was up 35.5%, from 21.5 billion yen to 29.1 billion yen ($237.3 million).
Results of the tire business unit
The tire business unit posted net sales of 154.2 billion yen (more than $1.2 billion), a 4.7% increase over 1H 2014. Operating income was up 33.7%, from 19.9 billion yen to 26,615 million yen ($217 million).
* Original equpment tires: While domestic sales were sluggish due to a decline in the number of automobiles produced in Japan (caused by a rebound drop following rush demand prior to the consumption tax increase), overseas sales expanded steadily thanks to the acquisition of new business. As a result, unit sales remained at the same level as the year-ago period, but due to a decline in the composition ratio of high-value-added products, net sales declined compared with the same period last year.
* Replacement tires, Japan: Due to a rebound drop following rush demand prior to the consumption tax increase and other factors, both unit sales and net sales declined compared with the same period last year.
* Replacement tires: Overseas: In North America, unit sales remain unchanged compared with the same period a year ago, but as a result of healthy sales in the high-value-added SUV product category, net sales increased compared with the same period last year. In Europe, unit sales and net sales declined compared with 1H 2014 due to the influence of aslipping economy. As a result, compared with the same period a year ago, unit sales declined while net sales increased for the overseas markets as a whole.
"In the second quarter cumulative period, due to raw material prices dropping to a lower level than anticipated and a cheaper-than-expected yen, operating income and ordinary income exceeded the previously announced forecast," said the company. "However, due to an additional posting of a provision of reserve for product warranties as an extraordinary loss, net income for the quarter underperformed the previously announced forecast.
"Regarding the full-year results forecast, for the same reasons the previously announced forecast will be adjusted upward for operating income and ordinary income, while net income for the current quarter will be adjusted downward."
For information on Toyo's fiscal year 2014 results, visit "Toyo increases tire sales by 7.7%."