ERJ staff report (TB)
Tokyo -- Toyo Tire & Rubber Co. Ltd. expects its fiscal 2009 net result to be a loss after falling into the red in the second quarter and first half.
For the six months ended 30 Sept., Toyo's net loss amounted to $20.9 million and operating income plunged 83.4 percent to $11.1 million as increased raw materials costs offset sales gains and other positive factors. Sales edged up 1.8 percent to $1630 million.
For the full year, Toyo is now forecasting a net loss of nearly $25 million (based on the Sept. 30 yen/dollar exchange rate), a 92.4-percent drop in operating income and 2.3-percent lower sales.
For the half year, Toyo's raw materials costs were up nearly $100 million over the same period in 2007, while exchange rate changes and higher operating expenses also produced negative effects, Toyo said. Raw materials costs over those incurred last year are expected to exceed $200 million.
The new forecast is a marked change from Toyo's projections announced three months ago, when the firm said it expected fiscal 2009 net income to be about $13 million. Toyo's net income for the fiscal year ended March 31 was $53.7 million, or 1.7 percent of sales.
The new sales forecast, for $3300 million, is nearly 6 percent lower than that projected in mid-August.
For the half year ended Sept. 30, Toyo's tyre business segment sales were up 2.1 percent to $1160 million, but operating income fell 83.8 percent to $10.7 million.
Going forward, Toyo said it anticipates gleaning $110 million in annual cost savings from its recently concluded business alliance with Bridgestone Corp.
From Tire Business (A Crain publication)