Sales are up, profitability is down for Toyo
Toyo Tire & Rubber Co. Ltd. posted net income of 4.1 billion yen on net sales of 241.6 billion yen for the first nine months of its 2011 fiscal year, which ends March 31, 2012. That compares to income of 5.1 billion yen on sales of 226.5 billion yen for the same period the previous year.
Based on the exchange rate on Dec. 31, 2011, Toyo recorded net income of $53 million on net sales of $3.1 billion between April 1 and Dec. 31, 2011. The income-to-sales ratio was 1.7%.
Operating income over the same period was nearly 11.6 billion yen ($149 million), an increase of 10.4% over the same period in fiscal 2010.
Toyo says Japan has been making a steady recovery from the East Japan Earthquake, and was able to complete the "all-fronts recovery" of the three factories damaged by the earthquake. However, the business environment in the nine months of fiscal year 2011 continued to be severe due to the following:
1. the steep increase in costs of crude oil,
2. the European debt crisis,
3. the high unemployment rate,
4. the stagnation in consumer spending, and
5. the sudden and progressive rise in the yen.
Toyo's tire business unit, which accounts for 76.2% of its sales, posted net sales of 184.2 billion yen and operating income of 10 billion yen.
In North America, Toyo says both its sales volume and net sales increased compared to the same period last year, "due to aggressive promotion activities and price increases."
As part of its five-year "Mid-term Business Plan ’11," the Toyo Tires Group is:
* working toward a speedy business expansion into the growth markets;
* building the best possible supply structure;
* expanding sales of high-value added products;
* making practical applications of environmentally conscious technology; and
* promoting further measures to increase manufacturing productivity.
In January, Toyo announced it is changing its accounting period from a fiscal year ending March 31 to a fiscal year ending Dec. 31. For more information, click here.