Toyo reports 169% increase in full-year 2014 net income

Toyo Tire & Rubber Co., Ltd. has reported 2014 consolidated business results showing net sales of 393,782 million yen (£2.146 billion; 2.899 billion euros, US$3.305 billion), up 6.4 per cent compared with 2013. Operating income amounted to 47,510 million yen (£259.657 million; 349.804 million euros; $398.756 million), a 27.6 per cent up on 2013. However, the fastest increase was in the net income category where the full-year total of 31,240 million yen (£170.281 million; 230.012 million euros; $262.2 million) was up a huge 169.4 per compared with a year ago.

Tyre specific net sales amounted to 312,208 million yen (£1.701 billion; 2.298 billion euros; $2.620 billion), an increase of 7.8 per cent on 2013. Here operating income operating income increased 34 per cent – and therefore faster than the group as a whole – to 45,318 million yen (£247 million; 333.664 million euros; $380.358 million), up 34.1 per cent.

As far as domestic Japanese OE is concerned, Toyo reported that new car sales were sluggish following the consumption tax hike, as a result of pre-tax-increase demand prior to implementation of new tax rules. This in turn meant Toyo’s unit sales and net sales declined compared to the same period the previous year.

However, as a result of adding new products and expanding the product line-up of the Tranpath minivan tyre series released 20 years ago this year, unit sales exceeded those from the same period the previous year. Nevertheless the company reports that “due to the impact of a decline in market prices and other factors, net sales remained at the same level compared to the same period last year.”

US economic recovery boosts overseas sales

Strong automobile sales recovery in the US is said to have boosted sales of high-value-added SUV and light-truck tyres. This is said to be the strong sales of the company’s flagship Open Country A/T II and Nitto-brand Terra Grappler products. Both unit sales and net sales exceeded those of the same period last year. In Europe, unit sales and net sales exceeded those of the same period last year too. This was reportedly based on strong sales of Proxes CF2 and fuel-efficient Nanoenergy 3 tyres as well as a favourable market in Russia, where the company “reinforced efforts to acquire new customers”.

Perhaps by the good replacement market result in America, Toyo says it will move ahead with expansion of supply capacity for US tyre production subsidiary Toyo Tire North America Manufacturing Inc. while pushing to further expand sales of light truck and SUV tyres.

Outlook warns of decreased net income in 2015

While the company suggested that net sales, operating income and ordinary income will increase by roughly five per cent by the end of 2015, profitability is expected to go the other way. This means Toyo predicts net sales of 425 billion yen; operating income of 49 billion yen; ordinary income of 45 billion yen – all up roughly 5 per cent – and net income and 28 billion yen (2014: 31,240 million yen).

Put this in the context of the company recent financial results in our “Company Profiles” section, here.