Another record year for Yokohama Rubber

Yokohama Rubber reports that its net sales, operating income, and net income climbed to record levels in fiscal 2014. This is the third consecutive year of record results for the company, and it opines that this performance “reflected robust growth in tyre business in the original equipment market in Japan and vigorous sales gains in markets overseas.” Yokohama’s earnings benefited from a decline in raw material costs and from the weakening of the yen, as well as from the sales growth.

Net income at Yokohama between January and December 2014 increased 15.7 per cent over the previous year, to 40.5 billion yen (£221.2 million), on a 4.3 per cent increase in operating income, to 59.1 billion yen (£322.7 million), and a 3.9 per cent increase in net sales, to 625.3 billion yen (£3.4 billion). Management plans to increase the annual dividend 4 yen, to 26 yen. That would comprise the interim dividend of 12 yen (£0.14), up from 10 yen in 2013, and a proposed year-end dividend of 14 yen, up from 12 yen in 2013.

Operating income in Yokohama’s tyre operations increased 5.6 per cent, to 48.6 billion yen (£265.4 million), on sales growth of 3.8 per cent, to 497.6 billion yen (£2.7 billion). The sales increase in the Japanese original equipment market resulted from growth vehicle production and from Yokohama’s success in promoting fuel-saving tyres to vehicle manufacturers. Sales in the Japanese replacement market were basically unchanged from the previous year in unit volume and in value. A surge in demand preceded the 1 April rise in Japan’s national sales tax, and heavy snows occasioned solid growth in sales of snow tyres. Offsetting those positive factors were a slump in demand in the wake of the sales tax hike and escalating price competition. In overseas business, Yokohama posted sales gains in unit volume and in value. The company’s tyre business continued to expand in China and in remerging markets, and it exhibited recovery in Europe.

In 2015, Yokohama’s projections call for another year of record results in operating income and net sales. Management projects that operating income will increase 8.4 per cent, to 64.0 billion yen (£349.5 million), on a 7.6 per cent increase in net sales, to 673.0 billion yen (£3.7 billion). It expects an 11.1 per cent decline in net income, to 36.0 billion yen (£196.6 million).

Further information about Yokohama Rubber’s financial performance can be found in our company profiles and reports section.