Toyo net income down

The first nine months of Japan’s 2011 financial year have been described by Toyo Tire & Rubber as being a “severe” business environment. During the nine month period between 1 April and 31 December 2011, the company experienced a 19.4 per cent year-on-year decrease in net income despite rising sales. Net sales increased 6.7 per cent during the timeframe in question, to 241.7 billion yen (£2.0 billion), while operating income and ordinary income rose 10.4 per cent and 11.9 per cent respectively, to 11.59 billion yen (£95.8 million) and 8.99 billion yen (£74.3 million). Despite stronger sales, net income sank by 985 million yen to 4.11 billion yen (£33.9 million) during the first three quarters.

“The business environment in the [first] nine months of FY2011 continued to be severe due to the steep increase in costs of crude oil, the European debt crisis and the employment remaining at a low and the stagnation in consumer spending,” said Toyo in a statement. The company added that progress in recovering from last year’s earthquake and tsunami in Japan – all three earthquake damage factories are now back at full strength – has been countered by the “sudden and progressive” rise of the Yen.

The company’s Tire business unit posted net sales of 184.2 billion yen (£1.5 billion), a year-on-year increase of 10.5 per cent and 76.2 per cent of total company sales. Operating income came to 10.0 billion yen (£82.8 million), a 26.2 per cent year-on-year increase.

For full year 2011, Toyo forecasts sales of 322.0 billion yen (£2.7 billion), a 9.5 per cent year-on-year increase. Forecast full year net income is 2.7 billion yen (£22.3 million), 418 per cent more than in 2010 yet decidedly less than the net income already posted for the first three quarters of the year.