Tokyo – The Yokohama Rubber Co. (YRC) has reported higher sales and operating profit for the year 2019, helped by its ATG heavy tires unit and its non-tire business.
Sales edged up slightly over the year, to Yen650.5 billion (€5.4 billion), while operating profit increased 9.5%, to Yen58.6 billion, Yokohama reported 14 Feb.
The Tokyo-based company linked the strong growth in operating profit to a first-quarter gain on the sale of fixed assets.
In addition, a third-quarter credit in connection with an operational restructuring in the company’s ATG (Alliance Tire Group) segment helped profitability.
Sales and business profit declined in Yokohama’s tires segment, reflecting "logistics expenses and the appreciation of the yen, as well as the decline in sales revenue," said Yokohama in a statement.
Segment profit fell 27% to Yen30 billion, while sales fell 0.6% to Yen451 billion.
Revenue declined in the original equipment business, where apart from North America, most markets remained weak.
In Japan, OE sales suffered from product changeovers for vehicle models equipped with Yokohama tires, the company statement said.
Sales of replacement tires grew, as the business benefited from strategic initiatives under the company’s medium-term management plan, Grand Design 2020 (GD2020).
In the multiple business segment, which supplies non-tire rubber products such as automotive hoses and conveyors, sales and profit increased.
Business in high-pressure hoses declined slightly despite overseas sales growth in automotive hoses.
Demand for high-pressure hoses for construction equipment was weak in China and, on account of the effect of typhoon damage, in Japan.
In the industrial materials segment, the company reported strong sales, led by vigour in conveyor belts in Japan and overseas.
Sales were flat in Hamatite sealants and adhesives, despite robust demand in the Japanese construction sealants market.
Business unit ATG, which manufactures farm, construction and off-road tires, recorded growth in sales and business profit, helped by “especially strong” developments in the replacement market.
For the 2020 fiscal year, the Japanese tire & rubber company expects sales to grow 1.5% to Yen660.0 billion yen, and operating profit to fall 6.9% to Yen54.5 billion.