Yokohama Rubber Co. Ltd. posted net income of 40.5 billion yen on net sales of 625.3 billion yen for its fiscal year ended Dec. 31, 2014. Both were records, according to the company.
Based on the average exchange rate for 2014, Yokohama recorded income of $665.5 million on sales of $10.2 billion for fiscal 2014. The company's income-to-sales ratio was 6.4%.
Operating income increased 4.3%, from 56.7 billion yen to 59.1 billion yen, also a record.
"The strong sales and earnings performance reflected robust growth in tire business in the original equipment market in Japan and vigorous sales gains in markets overseas," says Yokohama. "It also reflected sales growth in industrial products and in other products, led by gains in high-pressure hoses, in sealants and adhesives, and in aircraft fixtures and components."
In addition to sales growth, earnings benefited from the following:
* a decline in raw material costs and
* the weakening of the yen.
The sales increase in the Japanese original equipment market resulted from "growth vehicle production" and from Yokohama’s success in promoting fuel-saving tires to auto makers, according to the company.
Sales in the Japanese replacement market were basically unchanged from the previous year in unit volume and in value. A surge in demand preceded the April 1 hike in Japan's national sales tax, and heavy snows occasioned solid growth in sales of snow tires. Offsetting those positive factors were a slump in demand in the wake of the sales tax hike and escalating price competition.
In overseas business, Yokohama posted sales gains in unit volume and in value. The company’s tire business continued to expand in China and in remerging markets, and it exhibited recovery in Europe.
Management has proposed a year-end dividend of 14 yen, up from 12 yen in 2013. Combined with the interim dividend, the company's annual dividend will total 26 yen.
In 2015, Yokohama’s projections call for another year of record results in operating income and net sales. Management projects operating income will increase 8.4%, to 64 billion yen, and net sales will increase 7.6%, to 673 billion yen. An 11.1% decline in net income (to 36 billion yen) is also expected.
