Toyo Sales Up, Income Down in Half Year Results

Toyo Tires has released its consolidated business results for the first half of this fiscal year (ending 31 March, 2009). The report shows that the company’s tyre segment had upped its net sales from 120 billion yen in April-September 2007 to 123 billion yen (£841 million; 1 GBP = 146 JPY) this half-year. However, the company’s operating income in the same period dropped to 1.13 billion yen (£7.77 million), 16.2 per cent of the same period in the previous year, which yielded 6.99 billion yen.

Meanwhile, in the second quarter (July-September 2008) net sales fell to 60.4 billion yen (£419 million) from 61.6 billion in Q2 ’07-’08, while the tyre segment produced a Q2 ’08-’09 operating loss of 126 million yen (£875,000).

The company also revealed consolidated results for the half year by territory. Japanese net sales increased by 6.72 billion yen on last year’s H1, though Toyo experienced operating outgoings of 1.84 billion yen in its domestic market. The first six months also saw North American net sales (52.4 billion yen) and operating income (1.67 billion yen) decrease, though gains were made in other territory net sales: up to 26.8 billion yen from 25.9 billion last year.

The major contributor to the drop in ordinary income came from a 10.2 billion yen hike in raw materials and purchasing costs. The company offset some of these increases through sales factors – accounting for 4.9 billion yen more profits – and cost rationalisation – resulting in an extra 1.1 billion yen.

As a result of these figures, Toyo’s fiscal year predictions have been altered, with the tyre segment net sales projection reset to 251 billion yen (reduced from the 12 August 2008 figure of 269 billion). The company forecasts an operating income of 700 million yen, reduced from its previous prediction of 4.90 billion yen. In terms of the company’s consolidated figures by territory, Toyo expects a domestic market operating loss of 3.65 billion yen, while the North American and Other territories are predicted to earn 1.40 billion and 2.05 billion yen operating income respectively.

Finally, Toyo has forecasted new rubber volumes of 195,000 tonnes by the end of FY2008, a slight reduction on the FY2007 figure of 196,000 tonnes. Japan will produce 154,000 tonnes, with the remaining 41,000 tonnes coming from overseas. In the first half of FY2008, Toyo’s Japanese new rubber production was at 76,400 tonnes, while 18,400 tonnes came from overseas.