Yokohama Q1 Results ‘Stronger than Expected’

Yokohama Rubber posted a 150.2 per cent increase in net income, to 3.1 billion yen (£12.8 million), in the three months ended June 30 (the first quarter of the present fiscal year) compared with the same period in 2006. The company’s operating income increased 130.6 per cent to 4.3 billion yen (£17.7 million) and net sales rose by 13.8 per cent to 121.6 billion yen (£502.3 million). The company reports that the overall rise in sales was led by growth in markets outside Japan and in Yokohama Rubber’s Multiple Business (diversified products) Group.

Operating income in Yokohama’s Tire Group tripled in the first quarter, to 3.1 billion yen (£12.8 million) on the back of a 15.9 per cent increase in sales to 90.7 billion yen (£374.7 million). Leading the sales growth were gains in North America, Europe, and Asian (excluding Japan) markets. The sales growth, coupled with the weakening of the yen and price increases for Yokohama tyres, more than offset the continuing upward trend in prices for natural rubber and other raw materials.

In the Multiple Business Group sales increased 8.1 per cent to 30.9 billion yen (£127.7 million), with operating income increasing 14.3 per cent to 1.1 billion yen (£4.5 million). Sales growth was especially robust in industrial products and in aircraft products, and Yokohama also posted sales gains in hoses and sporting goods.

The stronger-the-expected fiscal results in the first quarter have prompted Yokohama to raise its interim and full-year fiscal projections. Management now projects that net income will increase 123.1 per cent in the six months to September 30, 2007, to 7.5 billion yen (£31.0). This contrasts with the projection announced on May 10, 2007: a decline of 34.5 per cent to 2.2 billion yen(£9.1 million). Operating income is anticipated to rise by 172.4 per cent to 9.0 billion yen (£37.2 million), as apposed to the May 10 projection of a 66.5 per cent increase to 5.5 billion yen (£22.7 million). Net sales are now tipped to rise 13.3 per cent to 252.0 billion yen (£1.04 billion), a slightly higher figure than the May 10 projection of a 9.7 per cent increase to 244.0 billion yen (£1.01 billion).

For the full year to March 31, 2008, management projects that net income will increase 39.3 per cent to 22.8 billion yen (£94.2 million) as opposed to be projected 6.9 per cent rise to 17.5 billion yen (£72.3 million). Operating income for the year is expected to be up 51.9 per cent to 32.0 billion yen (£132.2 million), as opposed to the May projection of a 35.3 per cent increase to 28.5 billion yen (£117.7 million). The anticipated net sales result has been revised to 540.0 billion yen (£2.23 billion), a 8.6 per cent increase. In May the company projected a 7.0 per cent rise in net sales to 532.0 billion yen (£2.20 billion).