Tokyo — Yokohama Rubber Co. Ltd.'s operating and net income fell during the six months ended 30 June due to increased manufacturing and logistics costs and the negative effects of lower unit sales volume.
Sales revenue grew 0.5% during the period as higher revenue in the firm's industrial rubber products and ATG off-road tire unit offset lower revenue in the tire business unit, Yokohama reported 8 Aug.
Business profit declined 27.5% to $156.4 million (€140 million) on sales of $2.83 billion. Operating profit was off 4.7% to $228.2 million and net income (profit attributable to owners) fell 6.2% to $151.8 million.
Business profit in the tire division fell 52.4% to $67.8 million on 1.6% lower sales revenue of $1.91 billion.
Yokohama attributed the revenue drop to lower original equipment sales in Japan and China.
Replacement sales, on the other hand, were on par with the same period in 2018, with gains noted in Japan and North America.
The ATG (Alliance Tire Group) business unit reported business profit and sales gains of 20.2% and 7.1%, respectively, to $47 million $338.6 million, on "robust" sales of agricultural tires.
Despite the half-year earnings declines, Yokohama said it abides by the full-year fiscal projections for 2019 that it announced in May: operating profit of $590 million on sales revenue of $6 billion, for an operating ratio of 9.8%.
Yokohama also reported lower earnings in the first quarter, ended 31 March.