Yokohama Reports Sales and Earnings Gains in 1H 2010

The Yokohama Rubber Company announced today that its sales in the first half of the present fiscal year (1 April – 30 September, 2010) increased 17.9 per cent over the same period of the previous fiscal year, to 238.3 billion yen. Sales in Yokohama's tyre operations increased 18.5 per cent over the first half of the previous fiscal year, to 184.9 billion yen, reported the manufacturer.

Interim operating income for the tyre operations totalled 6.1 billion yen, compared with an operating deficit of 2.5 billion yen in the first half of the previous fiscal year. Business was especially robust in the United States and in China, notwithstanding the challenge posed by the strengthening yen. Yokohama also recorded sales growth in Japan, both in the original equipment market and in the replacement market.

The company as a whole (Yokohama Rubber Co, Ltd) posted interim operating income of 8.3 billion yen and interim net income of 1.2 billion yen, compared with an operating deficit of 2.4 billion yen and a net deficit of 3.9 billion yen in the first half of the previous fiscal year. Leading Yokohama’s business upturn was the strong sales growth in tyres, as well as in high-pressure hoses, and in sealants.

This growth more than offset the adverse effect on earnings of rising prices for raw materials and the appreciation of the yen. Earnings further benefited from rises in capacity utilisation rates and from Yokohama’s progress in cost-cutting programs.

Yokohama Rubber Company projects that net sales across its units will increase 11.5 per cent in the fiscal year to March 31, 2011, to 520.0 billion yen; that operating income will increase 18.9 per cent, to 25.5 billion yen; and that net income will increase 0.1 per cent, to 11.5 billion yen. The projection for operating income is 41.7 per cent higher and that for net income 43.8 per cent higher than the projections released by Yokohama on May 12, 2010. Yokohama has retained the earlier projection for net sales, as the appreciation of the yen appears likely to offset unit sales growth. The heightened earnings expectations reflect progress in expanding sales volume and in trimming costs.