Hyogo, Japan — Toyo Tire Corp.'s first quarter results were impacted by a “sharp downturn” in consumer spending due to the outbreak of Covid-19 pandemic, the company announced 12 May.
Operating income fell 31.8% to Yen10.1 billion (€85 million) on 9% lower sales of Yen90 billion during the three months to end of March.
Sales in the tire segment declined 8.2% to Yen72 billion, while segment operating income fell 30% to Yen7.4 billion.
Automotive parts went into red with Yen474 billion loss, as segment revenue dropped 14% to Yen 9.7 billion.
Toyo reported weak results in all regions, including in North America where it posted a 40% decrease in operating income to Yen1.5 billion on 9.5% lower sales of Yen41 billion.
The company linked the declines mostly to the outbreak of Covid-19 and subdued demand following global restrictions on movement.
To address the issue, Toyo said it has been implementing an earnings structure reform scheme since March, which included revising its capex planning and drawing up a cost-reduction plan.
Toyo also withdrew its full year financial forecast for the year ending 31 December, due to uncertainties caused by Covid-19 pandemic.
The company had projected net sales of Yen386 billion (€3.3 billion) and operating income of Yen44 billion for the full year.
It, however, withdrew the guidance on 12 May, stating that the outbreak of Covid-19 and global restrictions on movement had impacted the purchasing behaviour of consumers.
“We are experiencing a setback in demand as consumer spending showed a sharp downturn in our key sales territories and elsewhere,” said a Toyo statement.