Yokohama Reports Positive Annual Results

An increase in net sales of 10.9 per cent has been reported by Yokohama Rubber for the fiscal year ending March 31, 2008. This figure is slightly higher than the recently revised projection of 10.6 per cent and equates to 551.4 billion yen (£2.74 billion). Operating income, at 33.1 billion yen (£164.77 million), was up 57.2 per cent, again slightly higher than the projected figure (56.6 per cent). Net income, at 21,06 billion yen (£104.84 million), was up by 28.7 per cent on last year’s results but 1.8 per cent below those of 2006.

Leading the sales growth were gains in tyre markets outside Japan, says Yokohama. Total tyre sales for the year were 419.83 billion yen (£2.09 billion), an increase of 12.6 per cent. The double-digit sales growth reportedly more than offset the still-rising prices for raw materials and the upward trend in logistics costs. Operating profitability also benefited from the weakening of the yen during the fiscal year. Operating income climbed 77.6 per cent in Yokohama’s Tire Group, to 26.0 billion yen (£129.67 million). Progress in expanding production capacity at Yokohama’s tyre plants in Asia supported the company’s unit sales growth in markets outside Japan. Also contributing to the increased operating income in the Tire Group was improved profitability at subsidiaries in the United States and in Asian nations besides Japan.

Management at Yokohama has proposed a fiscal year end dividend of 7 yen. Together with the interim dividend of 6 yen, that would raise the annual dividend to 13 yen. The worsening business is expected to adversely affect profitability in the fiscal year to March 31, 2009, says Yokohama management. Prices for raw materials appear likely to continue rising, and the recent appreciation of the yen will also diminish earnings. The company’s projections call for net income to decline 38.3 per cent on a 21.5 per cent decline in operating income, to 26.0 billion yen £129 million), and a 2.5 per cent increase in net sales, to 565.0 billion yen (£2.81 million).