Lower Q1 2023 profits for Yokohama Rubber

Yokohama Rubber Co., Ltd. has released its business and financial results for the first quarter of fiscal year 2023, reporting a 4.4 per cent decrease in profit compared to the same period last year, to 9.7 billion yen (£57.0 million). Operating profit declined by 2.4 per cent to 13.2 billion yen (£77.6 million), while business profit decreased by 4.8 per cent to 13.0 billion yen (£76.4 million). However, sales revenue saw a significant 10.1 per cent increase, reaching 204.3 billion yen (£1.2 billion), the highest ever for Yokohama Rubber in the January-to-March quarter.

The company attributes this increase in sales revenue to successful marketing of high-value-added tyre products such as Advan-brand high-performance tyres and Geolander tyres for SUVs and light trucks. The company also benefited from improvements in product mix, the implementation of price increases, and the weakening of the yen against other currencies during the quarter.

Business unit performance

Yokohama Rubber’s tyre business faced challenges due to increases in raw material prices, logistics costs, and energy costs. Additionally, there was a decrease in unit production at automakers due to semiconductor shortages. First-quarter business profit declined in the Tires segment despite a year-on-year increase in sales revenue. Original equipment tyre sales revenue grew due to new fitments on vehicles in Japan and North America, as well as favourable currency exchange rates. Replacement tyre sales revenue also increased, driven by heavy snowfalls in Japan and sales growth in China and other Asian markets.

Sales revenue and business profit grew in the MB (Multiple Business) segment. Hose & couplings sales revenue increased due to a recovery in vehicle production in North America, while industrial materials sales revenue grew with expansion in the conveyor belts business and demand recovery in the commercial aircraft sector.

Full-year projections revised upwards

Yokohama Rubber has upwardly revised its full-year fiscal projections for 2023 following the acquisition of Trelleborg Wheel Systems Holding AB (TWS). The revised projections anticipate profit attributable to owners of parent of 57.0 billion yen (£335.2 million), 23.9 per cent higher than the earlier projection; on an operating profit of 87.0 billion yen (£511.6 million), up 19.2 per cent; business profit of 84.5 billion yen (£496.8 million), 15.8 per cent higher than previously projected; and sales revenue of 1.0 trillion yen (£5.9 billion), 11.1 per cent higher than the earlier projection.