Yokohama Rubber Sales Increase 10.1%

The Yokohama Rubber Co., Ltd., announced on May 10 that its net sales had risen 10.1 per cent to 497.4 billion yen (£2.083 billion) in the fiscal year ended March 31, 2007. This sales total is the company’s highest ever, with sales growth resulting from unit sales gains and from a weaker yen, adding yen value to sales generated outside of Japan. The main increase in sales was seen in the company’s Tire Group and Multiple Business (diversified products) Group.

Operating income dropped by 4 per cent to 21.1 billion yen (£83.4 million), a figure the company has attributed to increases in raw material costs outpacing increases in net sales, and net income declined by 23.7 per cent to 16.4 billion yen (£68.7 million). This drop in net income reflected a tax benefit recorded in the previous year in connection with earlier write-downs of equity in a US subsidiary.

The Tire Group’s sales increased 11 per cent to 372.7 billion yen (£1.56 billion) with growth strongest in Europe and Australia plus other Oceania markets. OE sales in the company’s domestic Japanese market also increased, however replacement market sales declined in Japan due to a slump in demand for winter tyres resulting from minimal winter snowfalls. Operating income in the Tire Group declined 19.0 per cent to 14.7 billion yen (£61.5 million) with the industry-wide scourge of surging prices for natural rubber and other raw materials the main contributory factor.

Yokohama’s projections for the year to March 31, 2008 call for net sales to increase 7.0 per cent to 532.0 billion yen (£2.23) and for operating income to increase 35.3 per cent to 28.5 billion yen (£119.36 million). Part of the company’s increased supply capacity will be met through expansion in production capacity at its tyre plants in Thailand and the Philippines.