Yokohama posts record profits in year to March

Tokyo-The Yokohama Rubber Co., Ltd., has posted a 4.7 percent increase in operating income, to 21 900 million yen (€154 million), in the 12 months ended March 31, 2006. Net sales increased 7.7 percent, to 451 900 million yen (€3192 million), their highest level ever.

Operating profitability, said the company, benefited from growth in unit sales of tyres, progress in reducing costs, price increases, and the weakening of the yen relative to the dollar. Net income climbed 89.4 percent, to 21 400 million yen (€151 million), also a highest-ever figure. The increase in net income included a 4.3 billion yen extraordinary gain in connection with changes in the parent company's pension plan. It also included a tax benefit in connection with an earlier write-down of equity in a US subsidiary. Management has proposed a year-end dividend of 6 yen. Together with the interim dividend of 4 yen, that would raise the annual dividend 2 yen, to 10 yen.

By business segment, operating income declined 0.4 percent in Yokohama's Tire Group, to 18.1 billion yen, despite a 9.1 percent increase in sales, to 335 700 million yen, and increased 41.9 percent in the diversified products, to 3900 million yen, on a 3.8 percent increase in sales, to 116 100 million yen. Yokohama's tyre sales increased in Japan, led by strong growth in snow tyres in an especially snowy winter. They increased elsewhere, led by growth in North America. The decline in operating income in the tyre segment reflected higher raw material costs. In diversified products, the sales growth occurred as gains in high-pressure hoses, sealants, and aerospace products more than offset a decline in golf products. Yokohama succeeded in improving the structure of earnings notably in aerospace products and in industrial products.

Management projects that operating income in the next 12-month period will decline 4.3 percent, to 21 000 million yen, on an increase of 7.3 percent in net sales, to 485 000 million yen. High and rising raw material costs are the reason for the projected decline in operating profitability. Yokohama's projections call for net income to decline 51.0 percent, to 10 500 million yen.

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Press release from Yokohama