Tokyo – Yokohama Rubber Co. Ltd (YRC) reported lower net and operating income for the year ended 31 Dec as escalating price competition in tire markets offset the positive effects of declining prices for raw materials and the weakening of the yen.
Operating profit for the year slid 7.7 percent to $450.7 million (€404 million) on 0.7-percent higher sales of $5.21 billion, resulting in an 8.6-percent earnings ratio, down from 9.4 percent a year ago. Net income dropped 10.4 percent to $300 million.
Yokohama’s tire segment reported similar results – operating income down 11.4 percent to $355.6 million on 0.6-percent higher sales of $4.96 billion.
YRC cited lower unit volume in Japan, both in the replacement and OE markets, escalating price competition a diminished demand for studless winter tires due to last year’s warm winter in Japan.
Outside of Japan, Yokohama said it achieved tire sector growth, especially in North America and China, although it did not provide specifics.
Yokohama management projects sales and operating income will increase in 2016 by 3.5 and 0.9 percent, respectively, while net income will drop 6.4 percent. The company did not elaborate on its forecast.