Yokohama turns net loss into net gain
Yokohama Rubber Co. Ltd. posted net earnings of 11.5 billion yen on net sales of 466.4 billion yen for its fiscal year ended March 31, 2010. That compares to a net loss of 5.7 billion yen on sales of 517.3 billion yen for the previous fiscal year.
Based on the exchange rate on March 31, 2010, Yokohama recorded revenue of $124 million on sales of $5 billion. The income-to-sales ratio is 2.5%.
Yokohama says the profit turnaround "reflects a surge in operating profitability." Operating income rose 67.5%, to 21.5 billion yen.
Underlying Yokohama's surge in operating income were:
1. the reversal of the upward trend in raw material costs of recent years, and
2. the company's progress in reducing selling expenses and other costs.
Net profitability also benefited from "a sharp reduction in losses on currency translation adjustments."
Tire Group financial results
Sales declined 8.1% in Yokohama's Tire Group, to 367.5 billion yen (nearly $4 billion). The company noted that there was "renewed growth in sales of tires in Japan and overseas in the fiscal fourth quarter (January 1 to March 31, 2010)."
Operating income in the Tire Group more than doubled, rising 106.9%, from 9.9 billion yen to 20.5 billion yen.
"The downturn in raw material costs and Yokohama's cost-cutting measures more than compensated for the decline in sales," according to the company.
Yokohama projects a 30.4% decline in net income, to 8 billion yen, in its fiscal year from April 1, 2010, to March 31, 2011.
Management expects net sales to rise 11.5%, to 520 billion yen, "buoyed by growing demand in an improving economic environment." However, it expects operating income to decline 16.1%, to 18 billion yen, based on "the appreciation of the yen and resurgent raw material costs."