Yokohama posts 1Q loss of 1.8 billion yen
Yokohama Rubber Co. Ltd. posted a net loss of 1.8 billion yen on sales of 95.2 billion yen for its fiscal first quarter ended June 30, 2009. That compares to net income of 2.9 billion yen on sales of 123.1 billion yen for the same period the previous fiscal year.
Yokohama also reported a quarterly operating loss of 4.1 billion yen, compared with operating income of 4.1 billion yen in the first quarter of the previous fiscal year.
Based on the exchange rate on June 30, 2009, Yokohama's 1Q loss was $18.6 million on sales of $987 million. Its operating loss was $42.5 million.
The company says profitability suffered from the decline in sales and -- especially in tires and in high-pressure hoses -- from declining capacity utilization rates caused by shrinkage in unit sales volume. Profitability also suffered from the appreciation of the yen against the U.S. dollar and the euro.
Offsetting some of the decline in profitability was Yokohama's progress in reducing sales and administrative expenses.
In the company's Tire Group, sales slumped to 73.8 billion yen "amid weak demand in Japan and in North America, western Europe, and most other overseas markets," though Yokohama says it posted sales gains in tires in the Russian and Chinese markets. The group posted an operating loss of 3.6 billion yen, compared with operating income of 3.2 billion yen in the previous first quarter.
Yokohama projects that net sales will decline 5.3% to 490 billion yen in the fiscal year ending March 31, 2010. That projection "reflects continuing weakness in demand amid the global economic slowdown and concerns about a possible further appreciation of the yen," according to the company.
Yokohama also projects that operating income will increase 32.7% to 17 billion yen, and that the company will post net income of 7 billion yen (compared with a net loss of 5.7 billion yen in the previous fiscal year) based, in part, on the recent decline in prices for raw materials.
(All of these projections are unchanged from the projections released in May, when Yokohama announced its business and financial results for the previous fiscal year.)