Hyogo, Japan - Toyo Tire Corp. suffered a 6.4% drop in fiscal 2018 operating income on 2.9% lower sales.
Earnings fell to $384.3 million (€337.8 million), due to higher operating expenses and unfavourable foreign exchange rates throughout the year, which offset gains in the tire sales arena.
Net income fell 31.4% to $101.3 million on sales of $3.57 billion.
For fiscal 2019, Toyo executives are forecasting a slight rebound of 1.7% in sales.
However, operating income is expected to decline for the third year in a row, due to high operating and manufacturing expenses and an unfavourable foreign exchange rate.
Toyo's tire business posted a 1.8% improvement in operating income, to $425 million, on 4.5% higher sales of $3.1 billion. Toyo did not elaborate on the reasons for the improvements.
Toyo is projecting a 91% leap in capital investment in 2019 versus 2018, to $485 million, but it did not elaborate on its plans.
The company did, however, disclose in November nearly $500 million in projected capital investment spending as part of the strategic partnership with Mitsubishi Corp.
Among new concrete initiatives Toyo outlined for the capital infusion are $62 million earmarked to expand truck and bus tire capacities at plants in China and Malaysia.
Additionally, the company is investing $53 million and $89 million to support ongoing expansions at plants in White, Georgia, and Perak, Malaysia, respectively.
Toyo has also earmarked $293 million for new production facilities at sites yet to be disclosed covering up to 4 million tires a year.