Yokohama returns to black in Q2

ERJ staff report (DS)

Tokyo - The Yokohama Rubber Co., Ltd., posted net income of 1.6 billion yen (euro 14 million) in the three months to June 2010. This compares with a net loss of 1.8 billion yen in the same period of the previous fiscal year. Yokohama's net sales climbed 23.4 percent over the same quarter of the previous fiscal year, to 117.4 billion yen (euro 1043 million).

The company posted operating income of 5.9 billion yen in the fiscal first quarter, compared with an operating loss of 4.1 billion yen in the same period of the previous fiscal year.

Strong growth in unit sales of tyres, buoyed by global economic recovery, led Yokohama's gains in sales and earnings. Profitability improved as an upturn in capacity utilisation and progress in cutting costs more than offset the adverse effects of rising raw material costs and the appreciation of the yen.

Yokohama has begun reporting sales and earnings separately for industrial products and for other diversified products as of the present fiscal year. Its industrial products include high-pressure hoses, sealants and adhesives, conveyor belts, anti-seismic rubber-and-steel fittings for protecting bridges and other structures from earthquakes, marine hoses, and marine fenders. Other products consist mainly of aircraft products and golf products. Yokohama formerly reported aggregate figures for all of its diversified business as Multiple Business results.

In Yokohama's industrial products operations, operating income totaled 349 million yen, compared with a first-quarter loss of 351 million yen in fiscal 2010. Group sales were up 24.4 percent, to 18.9 billion yen. The resurgent sales and earnings in industrial products reflected business recovery in nearly every product category. Business was especially robust in high-pressure hoses and in sealants and adhesives.

Yokohama's projections call for operating income to total 4.0 billion yen in the first half of fiscal 2011 (April 1 to September 30, 2010). That compares with an operating loss of 2.4 billion yen in the same period of the previous year. Underlying the projected upturn in operating profitability is projected sales growth of 17.8 percent, to 238.0 billion yen. The projections call for Yokohama's interim net loss to shrink 64.1 percent from the first half of fiscal 2010, to 1.4 billion yen. Nonoperating losses associated with the strengthening yen appear likely to prevent a return to net profitability in the fiscal first half.

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Press release from Yokohama