Toyo Tire & Rubber Co. Ltd. posted net income of 61 million yen on net sales of 95.3 billion yen for the first quarter ended March 31, 2016. That compares to a net loss of 3.1 billion yen on sales of 95.8. billion yen for the same period last year.
Based on the exchange rate on March 31, 2016, Toyo recorded net income of $54.3 million on net sales of $848 million in its operations for its 1Q 2016. Operating income fell 5.1%, to 11.9 billion yen ($106.5 million).
The company's earnings were affected by an extraordinary loss of 9,218 million yen ($82 million) related to costs to replace defective earthquake shock absorbers installed in buildings.
Toyo explained the extraordinary loss this way: “The company posted an extraordinary loss of 9,218 million yen (2,033 million yen for the cost of measures for after-care of products and 7,185 million yen for provision of reserve for product warranties) as a result of posting 5,568 million yen for the cost of repairs and replacement of seismic isolation products for 55 structures; 1,539 million yen for compensations, etc.; and 2,003 million yen for miscellaneous expenses (mainly, 500 million yen in payroll for the seismic isolation rubber task force; 400 million yen for structural recalculation; and 300 million yen for the cost of trial manufacturing of replacement products using the company's own products).”
Tire Revenues Edge Up
Toyo said the tire business unit posted net sales of 76,186 million yen ($678 million), or 0.4% higher than the same period in 2015). Operating income was 11,182 million yen ($99.5 million), a decrease of 4.5% from the same period in 2015.
In Japan, original equipment unit sales and net sales exceeded those of the same period a year ago on sales of cars equipped with company products despite a continuing decline in the number of automobiles produced in Japan. Overseas unit sales and net sales also outperformed those of the same period last year as a result of acquiring new business. As a result, unit sales and net sales for the original equipment tire market as a whole exceeded the performance of the same period a year ago.
The company said unit sales of replacement tires for the Japanese domestic market exceeded the performance of the same period last year while net sales remained at the same level on robust sales of the company's Proxes flagship brand ultra-high-performance (UHP) tire series and NanoEnergy fuel-efficient brand tires.
In the replacement tire market, revenues increased while earnings decreased “despite halthy sales in Japan, North America and Europe.”
In North America, replacement tire unit sales outperformed the same period last year while net sales remained at the same level.
In Europe, both unit sales and net sales exceeded those for the same period last year as a result of promotions targeting the entire Russian market, according to the company.
As a result, for the overseas market overall unit sales increased compared to the year ago period while net sales remained at the same level as a year ago.
For Toyo's 2015 results, see: "Toyo’s Tire Sales Increased 4.3% in 2015."
