ERJ staff report (DS)
Tokyo-The Yokohama Rubber Co., Ltd., said net sales for the six months to September 2011 increased 8.4 percent to 258.2 billion yen (euro 2450 million). That growth resulted primarily from a surge in tyre business, led by strong sales in Japan's replacement market. Profits, however, declined 8.3percent, to 7.6 billion yen (euro 72 million), on account of rising raw material costs, the appreciation of the yen, and an increase in selling, general and administrative expenses.
Despite the decline, Yokohama's operating profit was 26 percent ahead of its previous forecasts of 6.0 billion yen. Yokohama's higher-than-projected operating profitability reflected increases in selling prices for products and progress in trimming costs.
Yokohama posted a 10.7 percent sales increase in tyres, to 204.7 billion yen. Operating income in the company's tyre operations declined 2.0 percent, to 6.0 billion yen, on account of rising raw material costs and the appreciation of the yen. Yokohama's strong sales gains in replacement tyres in Japan reflected growth in the used-vehicle market. Those gains more than offset a sales decline in original equipment tyres, which reflected the aftereffects of the Great East Japan Earthquake. Yokohama also posted sales gains in tyres overseas, led by growth in Asia and in Europe.
Yokohama posted sales growth of 0.7 percent, to 41.7 billion yen, in industrial products, which consist mainly of high-pressure hoses, sealants and adhesives, conveyor belts, anti-seismic products, marine hoses, and marine fenders. Operating income in industrial products declined 71.2 percent, to 452 million yen, on account of rising raw material costs and the appreciation of the yen. Sales of high-pressure hoses increased as gains in hoses for construction equipment offset declines in automotive hoses, which reflected the aftereffects of the Great East Japan Earthquake.
Yokohama is switching its fiscal accounting in 2011 to a calendar-year basis, from an April-March accounting period. The change will result in an irregular, nine-month fiscal period of April to December 2011 and will therefore preclude meaningful year-on-year comparisons of business results.
The company has revised its business and financial projections for the nine-month fiscal period in accordance with the growing fiscal and financial uncertainty worldwide, the continuing strength of the yen, and the rising cost of raw materials. Yokohama's latest projections call for net sales of 460.0 billion yen, operating income of 21.0 billion yen, and net income of 8.5 billion yen in the nine-month fiscal period to December 31, 2011. Yokohama has announced that the annual dividend will total 7 yen per share: an interim dividend of 3 yen and a period-end dividend of 4 yen.
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Press release from Yokohama