Yokohama Net Income Increases Almost 300% in Half-Year

The Yokohama Rubber Co., Ltd. has announced that during the first half of the company’s current fiscal year, between April 1 and September 30, 2007, it recorded a 266.7 per cent increase in interim operating income over the same period of the previous year. Interim operating income at Yokohama totalled 12.1 billion yen (£51 million), and interim net income rose 287.6 per cent over the previous year to 13.0 billion yen (£54.8 million).

The company’s profitability increased greatly as sales growth outside Japan, especially in tyres, more than offset the continuing rise in raw material costs and an increase in logistics expenses. Also contributing to the surge in profitability were price increases for Yokohama’s tyre and diversified products and the weakening of the yen. Net income was aided by a tax benefit realised in connection with improved profitability in Yokohama’s North American subsidiaries, as well as from the upturn in operating profitability. Yokohama’s interim net sales increased 13.9 per cent to 253.3 billion yen (£1.1 billion).

Yokohama has described the company’s growth in profitability as being driven by the ‘robust fiscal performance’ of Yokohama Tire. Sales for Yokohama’s tyre operations increased 16.2 per cent to 188.7 billion yen (£795.6 million), a figure that accounted for 75.5 per cent of total company sales. Operating income for Yokohama Tire was recorded as 9.0 billion yen (£37.9 million), a 703.2 per cent increase on the same period last year and 74.6 per cent of total company operating income. Profitability grew at Yokohama’s subsidiaries in the US and in Asian markets besides Japan. Sales growth occurred despite a small decline in sales of replacement tyres in Japan and consisted mainly of gains in markets outside Japan.

For the full year, Yokohama retains the projections it announced on August 9. The company projects full-year increases of 39.3 per cent in net income, to 22.8 billion yen (£96.1 million); 51.9 per cent in operating income, to 32.0 billion yen (£134.9 million); and 8.6 per cent in net sales, to 540.0 billion yen (£2.3 billion). Yokohama’s strong first-half profitability has prompted the company to raise its interim dividend of 1 yen to 6 yen. Management plans to maintain the year-end dividend at 7 yen. The annual dividend will thus rise 1 yen over the previous year, to 13 yen.