Toyo Results Highlight Financial Difficulties

Toyo Tires has released its consolidated business results for the first three quarters of the 2008 financial year, revealing results down on those a year earlier. Net sales for the nine month period were 269,357 million yen (£1.98 billion), just under one per cent less than for the first three quarters of the 2007 year. Operating income, at 611 million yen (£4.5 million), plummeted 95.3 per cent from last year’s figure of 12,951 million yen, and net loss for the nine month period amounted to 9,990 million yen (£73.57 million) as opposed to 6,946 million yen in 2007.

Results for the third quarter paint a similar picture. Net sales are barely unchanged, down only 5.6 per cent from last year to 96,536 million yen (£710.88 million). Operating profit, however, declined from 5,864 million yen in 2007 to a loss of 565 million (£4.16) this year. Net loss for the quarter was 7,776 million yen (£57.26 million), compared with a net profit in 2007 of 6,308 million yen.

Net sales for Toyo’s tyre segment rose 1.7 per cent during the nine month period to 197,443 million yen (£1.45 billion), while during this time tyre segment operating profit decreased from 12,374 million yen to 1,178 million yen (£8.67 million). While this segment of Toyo’s business experienced a seven million yen profit in the first nine months of 2007, this year it delivered a three million yen (£22,000) loss. During the third quarter, sales rose 1 per cent to 74,931 million yen (£551.78 million), while operating profit decreased 99.1 per cent, from 5,386 million yen to 46 million yen (£338,700). While last financial year the segment made neither a profit nor loss in the third quarter, in the third quarter of 2008 the tyre segment generated a two million yen (£14,700) loss.

In response to these negative results, Toyo has announced a number of cost saving measures it plans to undertake. These will be reported on separately.