Tires take Yokohama to record sales and earnings

ERJ staff report (PR)

Tokyo - Yokohama Rubber Co. Ltd. has posted a 23.8-percent, year-on-year increase in operating income, to Yen23.6 billion (€173.4 million) for the first half of 2014 on first-half sales 5.3 percent higher at Yen283.9 billion – its highest ever levels for either fiscal measure.

The Japanese group linked the gains to strong sales growth in tires in Japan and in overseas markets. In industrial products, it registered solid sales gains in high-pressure hoses and in sealants and adhesives. Renewed growth in golf equipment, meanwhile, energized the company’s business in other products.

Earnings in each segment benefited additionally from a downward trend in raw material prices and from the weakening of the yen, according to a Yokohama results announcement, issued 8 Aug.

In Yokohama’s tire operations, operating income increased 33.4 percent over the prior-year first half to reach Yen18.5 billion, on 5.7-percent higher sales of yen 221.9 billion.

Yokohama reported “vigorous growth” in its OE tire business in Japan, helped by a spike in demand ahead of a 1 April hike in Japan’s national sales tax, increased shipments of tires for fuel-saving vehicle models, and fitment wins on several vehicle models.

Yokohama’s Japanese business in replacement tires, meanwhile, also benefited from the tax hike and from growth in demand for studless winter tires and in summer tires.

Heavy snowfalls stimulated demand, meanwhile, for Yokohama’s studless winter tires. In overseas business, recovery in North America, in Europe, and in China more than offset continuing weak demand in Russia and in some other markets.

Operating income in the industrial products business edged up 1.2%, to Yen3.6 billion, on a 3.6% increase in sales, to Yen49.2 billion.

Yokohama highlighted sales gains in Japan in hoses for construction equipment, in sealants and adhesives for construction and automotive applications, and in conveyor belts, as well as for automotive hose products in North America.

In other products, however, operating income fell 9.8% to Yen 1.4 billion, on sales down 3.7 percent to Yen12.8 billion. Yokohama’s business in golf equipment featured strong growth in Japanese sales of certain lines of golf clubs and sales gains in the Republic of Korea and in Taiwan.

Business in aircraft fixtures and components was weak in the government sector, but sales were strong in lavatory modules for commercial aircraft.