Toyo Posts Net Loss in Q1 2008

Toyo Tire & Rubber has announced its consolidated business results for the first quarter of the 2008 financial year, the period between April 1 and June 30, 2008. Compared with the same period in 2007, net sales increased to 86.639 billion yen (£410.9 million), a rise of 4.6 per cent, while operating income decreased a significant 70.1 per cent, to 1.259 billion yen (£5.97 million). Ordinary income decreased to 1.205 billion yen (£5.71 million), down 71.6 per cent. The company reports a net loss of 1.438 billion yen (£6.82 million); in the first quarter of the 2007 financial year net income was 3.632 billion yen (£17.23 million).

The company’s tyre segment posted net sales of 62.141 billion yen (£294.72 million), an increase of 6.3 per cent compared with the same period the previous year, accounting for 71.7 per cent of total net sales. Sales of original equipment tyres for the domestic Japanese market significantly exceeded those of the first quarter of the 2007 financial year due to expanded sales of high value-added products. Sales volumes of replacement tyres for the domestic market drastically decreased and net sales fell below the level of the same quarter of a year earlier, due to sluggish demand partly caused by increasing fuel prices. Meanwhile, overseas sales volumes and amounts exceeded the levels of the same period of the previous year. In the North American market, sales volumes increased, while net sales were on par with the level of the same period of the previous year, due to the impact of foreign exchange rates. In European and South East Asian market, sales volumes significantly increased thanks to steady growth in sales.

At the same time, Toyo has revised its consolidated and non-consolidated performance forecasts for the interim period (April 1, 2008 to March 31, 2009) of the fiscal year ending March 31, 2009. The company now anticipates net sales of 371 billion yen (£1.76 billion), 6 billion (£28.46 million) more than in the performance forecast released May 13. However Toyo has revised both operating and net income downwards: operating income, now projected to be 5.8 billion yen (£27.71 million), is 2.7 billion (£12.81 million) less than the May 13 projection. Net income, at an estimated 1.4 billion yen (£6.64 million), is 800 million (£3.79 million) less than previously anticipated. These forecast figures were revised mainly due to further increases in raw material prices.