Yokohama profits down despite record sales

Tokyo - Yokohama Rubber Co. Ltd. reported record sales for the fiscal year ended March 31, but operating and net income fell on the effects of higher raw materials prices and one-time tax benefits recorded in the previous year.

For fiscal 2008, Yokohama is forecasting a rebound in operating income and 7-percent growth in sales.

For fiscal 2007, Yokohama's operating income fell 4 percent to $180.3 million on 10.1-percent higher sales of $4.25 billion, for an operating ratio of 4.2 percent. Sales were up on the combination of higher unit sales and currency exchange gains from a weakening yen.

Net income was off 23.7 percent to $140.2 million, but the fiscal 2006 figure was artificially high because of a tax benefit related to the write-down of assets in a US subsidiary, Yokohama said.

Yokohama's Tyre Group reported 11-percent higher sales of $3.19 billion, led by growth in Europe, Australia and other markets in Oceania and in original equipment sales in Japan. Operating income fell 19 percent to $125.6 million on the effects of higher raw materials costs.

The company's Multiple Business Group reported operating income and sales increases of 7.2 and 7.3 percent, respectively.

For the current fiscal year, Yokohama management anticipates non-operating factors and a decline in foreign exchange gains that “appear likely to restrain the growth in pretax income.”

From Tire Business (A Crain publication)