Yokohama Rubber raises full-year guidance on ‘record earnings’

Tokyo – The Yokohama Rubber Co. (YRC) has raised its full year financial outlook on the back of a strong nine-month performance.

The Japanese group saw operating profit over the first three quarters increase seven-fold to Yen59.3 billion (€454 million) compared to 2020 and up 77% compared to the same period in 2019.

Nine-month sales increased 22% to Yen460 billion, on a par with 2019 levels, YRC announced 12 Nov.

Yokohama said the figures posted for profit attributable to owners of parent, operating profit and business profit were “the highest ever for the first nine months of a fiscal year.” 

The group did not provide financial details for the third quarter but said its sales revenue exceeded the pre-Covid 2019 levels. 

Over the nine-month period, Yokohama’s tires segment posted 420% increase in business profit to Yen22.1 billion, on 19% higher sales at Yen317.3 billion. 

The group saw a revenue increase in original equipment tires, despite the adverse effect of global shortages of semiconductor chips on vehicle production in Japan, North America, China, and other regions. 

Sales revenue also increased in replacement tires, helped by ‘high-value-added’ products. 

Revenue and business profit both climbed to record levels in Yokohama’s ATG segment, which comprises agricultural machinery, industrial machinery, and off-highway tires. 

Business profit grew 80% year-on-year to Yen11 billion, and up 47% compared to 2019, on 62% stronger sales at Yen76.7 billion.

The strong performance, YRC said, reflected sales gains in all of ATG’s principal product categories.

In the ‘multiple business’ segment, Yokohama sales were up 4.2% at Yen60 billion, but well under the Yen87 billion reported in 2019.  Segment profit was up 24% year-on-year at Yen2.6 billion, but significantly lower than the Yen5.6 billion reported in 2019.

A market recovery in the construction equipment sector lifted sales in hose & couplings area, while revenue declined in industrial products, due mainly to lower demand from the marine industry.

The decline in marine demand, Yokohama said, was due to delays in large projects, which offset strength gained in the conveyor belts business in Japan. 

Sales in aircraft fixtures and components continued to decline due to weakness in demand.

Yokohama’s results did not include the Hamatite sealants and adhesives business, which was sold to Sika in the third quarter.

In view of the strong nine-month performance, Yokohama has revised up its full-year fiscal projections for 2021 sales and earnings.

For the full year, Yokohama expects profit attributable to owners of parent to total Yen58.0 billion, up 0.9% over the earlier projection, on operating profit of Yen74.5 billion, up 1.4% and sales revenue of Yen655.0 billion which remained unchanged.