Yokohama Rubber Revises Projections

Yokohama announced today (Tuesday, 28 October) that it has diminished its projections for consolidated net sales and net income in the six months period between April 1 and September 30, 2008 (the first half of the fiscal year to March 31, 2009). Now the company has reported that it expects to see net sales increase by 1.4 per cent over the same period of the previous year to 257 billion yen (1.7 billion pounds sterling – assuming 1 GBP = 149.138 JPY). It also expects operating income to decline 54.6 per cent, to 5.5 billion yen (36.9 million GBP) and for net income to decline 96.2 per cent, to 500 million yen (3.4 million GBP).

The revised projection for net sales is 2.7% lower than the projection Yokohama announced on 12 May, 2008, when the company announced its results for the previous fiscal year. The projection for operating income is unchanged from the earlier projection, and the projection for net income is 75 per cent lower.

The downward revisions in projected sales and net profitability are an effect of the disconcerting trends in financial markets on demand in the USA, Europe and in other markets. Aggravating the decline in profitability were the sharp appreciation of the yen, which diminished the yen-denominated value of foreign-currency assets, and an increase in taxes payable, which reflected the partial relinquishment of a tax benefit related to the elimination of unrecognized gains on inventories.