Yokohama reports record 1H sales
The Yokohama Rubber Co., Ltd., reported record first half sales for the first six months of 2013. According to the company, net sales edged up 0.3 per cent over the same period of the previous year, to 269.7 billion yen. However, while sales were high, profitability took a hit. Operating income declined 4.2 per cent, to 19.1 billion yen, and net income was down 5.3 per cent, to 13.0 billion yen. The tyre division appears to have borne the brunt of this.
As a result of the less than happy news Yokohama has revised down the 630 billion yen sales projection it issued in February 2013, to 610 billion yen. The new figure equates to an increase of 9.0 per cent over the previous year. However the company retains the February projections of 59 billion yen for operating income, an increase of 18.7 per cent; and 36 billion yen for net income, an increase of 10.4 per cent.
The official line is that a sharp decline in demand for original equipment tyres in Japan combined with generally weak demand in overseas tyre markets along with “escalating price competition in tyre markets worldwide” were said to have been behind the profitable decline. That said sales and earnings benefited from cost cutting measures and the weakening yen as well as declining raw material prices.
Tyre operations
Nevertheless sales within Yokohama’s tyre operations declined 0.6 per cent to 209.8 billion yen. Operating income declined 17.9 per cent to 13.9 billion yen. However Yokohama reports that it achieved unit sales growth in Japan’s replacement tyre market, led by gains in fuel-saving tyres. The problem is that the higher unit sales were of lower value products as the domestic market shifted toward lower-priced products as a result of escalating price competition. Overseas, tyre demand slumped in Europe and in China, and sales were weak in North America.
Yokohama has announced an interim dividend of 10 yen per share, and management has proposed a year-end dividend of 12 yen per share, which would bring the full-year dividend to 22 yen per share.
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