First-half 2014 results a record for Yokohama Rubber

Yokohama Rubber Co., Ltd. reports that its net sales, operating income and net income reached record first-half highs in the first half of the 2014 financial year. Net income climbed 38.4 per cent over the same period of the previous year to 18.0 billion yen (£104.9 million), on a 23.8 per cent increase in operating income to 23.6 billion yen (£137.6 million), and a 5.3 per cent increase in net sales to 283.9 billion yen (£1.7 billion). Underlying this performance was a strong sales growth in the company’s tyre business, both in Japan and internationally, along with gains in a number of other business areas. Earnings in each segment benefited additionally from a downward trend in raw material prices and from the weakening of the yen.

Operating income in Yokohama’s tyre operations increased 33.4 per cent over the same period of the previous year to 18.5 billion yen (£107.8 million), on a 5.7 per cent increase in sales to 221.9 billion yen (£1.3 billion). Yokohama posted vigorous growth in original equipment business in Japan. Driving that growth were a surge in demand in advance of the 1 April hike in Japan’s national sales tax, increased shipments of tyres for fuel-saving vehicle models, and success in winning original equipment fitments on additional vehicle models.

Yokohama’s Japanese replacement tyre business in also expanded, including growth in studless winter tyres and in summer tyres. As in original equipment, replacement business benefited from surging demand in advance of the increase in the national sales tax. Heavy snowfalls stimulated demand, meanwhile, for Yokohama’s studless winter tyres. Overseas, recovery in North America, in Europe, and in China more than offset continuing weak demand in Russia and in some other markets.

The company has revised downward the 647 billion yen (£3.8 billion) full-year sales projection that it issued in February 2014, to 635 billion yen (£3.7 billion). This will nevertheless be a 5.5 per cent increase over last year. The company abides by its February projection of 63 billion yen (£367.2 million) for operating income, an increase of 11.2 per cent, and it has revised upward its February projection of 37.5 billion yen (£218.6 million) for net income, to 42 billion yen (£244.8 million). The upward projection suggests a 20.0 per cent increase in net income. Yokohama has announced an interim dividend of 12 yen per share, an increase of 2 yen over the previous interim dividend, and management has proposed a year-end dividend of 14 yen per share, also an increase of 2 yen over the previous year. Those increases would bring the full-year dividend to 26 yen per share, an aggregate increase of 4 yen over the previous year.

Further financial and company information for Yokohama Rubber can be obtained here.