Yokohama posts impressive first-half financial numbers
Yokohama Rubber Co. Ltd. posted net income of 13 billion yen on net sales of 253.3 billion yen for its first-half of fiscal 2008 ended Sept. 30, 2007.
Compared to the first half of fiscal 2007, net income was up 3.9-fold, while net sales were up 13.9%. Net income benefited from a tax benefit realized in connection with improved profitability in Yokohama's North American subsidiaries, as well as from the upturn in operating profitability.
Operating income totaled 12.1 billion yen, a 3.7-fold increase compared to the same period of the previous year.
Based on the latest exchange rate, Yokohama recorded net income of $116.9 million on net sales of $2.27 billion for the first half. Operating income totaled $108.8 million.
"Profitability surged as sales growth outside Japan, especially in tires, more than offset the continuing rise in raw material costs and an increase in logistics expenses," said the company. "Also contributing to the surge in profitability were price increases for Yokohama's tire and diversified products and the weakening of the yen."
Operating income in its tire group increased 8-fold, to 9 billion yen, and sales 16.2%, to 188.7 billion yen, reflecting improved profitability at Yokohama's subsidiaries in the United States and in Asian nations besides Japan.
The sales growth occurred despite a small decline in sales of replacement tires in Japan.
Comparing its projected fiscal 2008 results to the previous 12 months, Yokohama expects the following results:
* a 39.3% increase of 39.3% in net income, to 22.8 billion yen;
* a 51.9% increase in operating income, to 32 billion yen; and
* an 8.6% in net sales, to 540 billion yen.
Yokohama's strong first-half profitability has prompted the company to raise its interim dividend one yen, to six yen. Management says it plans to maintain the year-end dividend at seven yen.
The annual dividend would thus rise one yen over the previous year, to 13 yen, or close to 12 cents per share.