Yokohama Rubber posts ‘record sales, earnings’ on strong consumer demand

Hiratsuka, Japan – Yokohama Rubber Co., Ltd (YRC) has reported record sales and earnings for the first nine months of the year, driven by a recovery of demand in the local Japanese market.

Sales for the first nine months increased 12% year-on-year to Yen877.2 billion (€4.9 billion) while business profit (earnings) grew 20.8% to Yen100.7 billion, YRC reported 14 Nov.

The Japanese group linked the improved earnings to “the strong performance of existing businesses” which offset one-off costs related to the acquisition and consolidation of Goodyear’s OTR business in February (ERJ report).

Tire business profit rose on an increase in unit sales of consumer tires and continued growth in sales of its “high-value-added” Advan, Geolandar, and winter (AGW) tires as well as high-inch tires.

Over the first three quarters, YRC said, consumer spending in Japan “picked up moderately” following a trade deal with the US as well as improved employment and income conditions.

In addition, it added, overall business sentiment remained generally positive, with support from investment in machinery and construction.

In overseas markets, YRC said the US economy has moved into a downturn as corporate profits are being squeezed by higher tariff rates.

European economies, meanwhile, continue to be depressed by sluggish external demand caused by higher tariffs, while the Chinese economy has begun to slow slightly now that the positive impact from last-minute exports to the US has subsided.

Breaking up segment performance, YRC said its ‘tire segment’, which includes both consumer and off-the-road (OHT) units, reported a 13.5% year-on-year increase in sales to Yen795.8 billion, accounting for 90.7% of group consolidated revenue.

Segment earnings grew 18% year-over-year to Yen93 billion, helped by higher volumes.

The OHT unit contributed Yen275.8 billion to the segment’s revenue, up 24% compared to the same period last year, while unit earnings increased 11% to Yen22.1 billion.

In the consumer unit, OE tire sales came in higher than last year on increased fitments in Japan and North America.

In North America, sales growth was driven by strong demand from makers of SUVs and CUVs.

Replacement tire revenue also increased year-on-year as YRC continued “aggressive sales activities in Japan, strengthened marketing of high-inch tires in Europe, and developed new customers.”

The OHT business sales increased with a strong contribution from the Goodyear OTR business.

Meanwhile, YRC said it increased its market share in the OE farm tire market despite the environment remaining “difficult”.

In the OHT replacement market, the group said it is leveraging a multi-brand strategy focused on its Mitas, Alliance, and Galaxy brands to expand sales in all regions.

In the first three quarters of the year, YRC said, the OHT replacement business registered above-market revenue growth in Europe and North America.

The MB (multiple businesses) segment, meanwhile, posted slight growth in sales to Yen75.1 billion, accounting for 8.6% of the group’s consolidated sales.

The segment’s earnings improved by 37% year-on-year to Yen7 billion, helped by improved profitability in the aerospace products business and other structural reforms.

The segment’s hose & couplings business posted a year-on-year decline in revenue owing to lower demand from construction machinery makers in Japan and car makers in North America.

The industrial products business reported higher sales, helped by domestic conveyor belt demand.