Toyo Tires results down as group expects €90m Iran war headwind

Hyogo, Japan – Toyo Tire Corp. has reported a weak first quarter due in part to higher production costs as well as the impact of US tariffs.

For the first quarter of fiscal year 2026, Toyo reported consolidated net sales of Yen130.9 billion (€708 million), down 3.4% year-on-year.

Operating income declined 8.1% to Yen20.6 billion, reflecting a Yen4.2 billion impact of tariffs and a Yen1.3 billion impact of production costs and SG&A expenses, particularly offset by the positive Yen3.9 billion effect of raw materials cost.

Within the tire business, sales fell 3.6% year-on-year to Yen119.3 billion, while operating income declined 8.5% to Yen20 billion, Toyo reported 15 May.

The automotive parts business posted sales of Yen11.6 billion, down 1.1%, while operating income rose 11.3% to Yen567 million.

For the full year, Toyo said it expects sales to rise 4.2% year-on-year to Yen620 billion, but operating income to decline 3.4% to Yen94 billion.

This is partially due to the impact of the ongoing Middle East crisis, which Toyo expects to have a Yen16.6 billion (€90 million) effect on full-year operating income.

The conflict, Toyo said, is expected to drive higher raw material, logistics and energy costs.

The Japanese group noted that rising crude oil prices and shipping disruptions were creating significant pressure across its business.

The largest impact is expected to come from raw materials, estimated at Yen13 billion, followed by marine transport costs of Yen2.2 billion and energy-related expenses of Yen1.4 billion.

According to Toyo, rising oil prices are affecting petrochemical feedstocks and natural rubber costs, while broader logistics inflation is also feeding into pricing.

Shipping costs have also increased sharply as vessels serving North America and Europe reroute around the Middle East conflict zone, leading to fuel surcharges and higher freight rates.

Toyo said energy costs were rising mainly at its Japanese manufacturing plants.

To offset the impact, the group said it is implementing price increases across regional markets, negotiating with shipping companies, increasing local-for-local production allocation, and promoting sales of larger wheel and tire (WLTR) products, where demand remains strong.

The group is also implementing additional cost reduction measures to absorb the impact of the conflict.