Yokohama reports ‘record high’ profits, revenue

Tokyo – Yokohama Rubber Co. (YRC) has reported ‘record high’ sales and business profits for the first three quarters of the year, amid rising costs and continued pressure on the automotive industry.

The Japanese tire & rubber group posted a 24% increase in business profit to Yen46 billion (€319 million), on a 33.7% increase in sales to Yen616 billion over the nine months to end of September.

Business profit is equivalent to operating income under accounting principles generally accepted in Japan and consists of sales revenue less the sum of cost of sales and selling, general and administrative expenses.

In a statement 11 Nov, Yokohama said it struggled with the adverse effects of rising raw material costs and logistics expenses, reduced vehicle production due to the shortage of semiconductor devices, and Covid-19 lockdowns in China.

However, it said, the group offset the impact of the challenges through increased tire sales in Japan and overseas, and due to the depreciation of the yen.

Over the first nine months, the Tires business unit reported an overall growth of 37% to Yen540 billion, reflecting a 56% increase in off-highway tire sales to Yen120 billion.

Business profit rose 31% to Yen43.8 billion, as off-highway profits grew 58% to Yen17.7 billion.

Yokohama said it increased revenue in the OE segment for passenger cars and commercial tires.

“Automakers began to ‘redouble’ production output [in the third quarter] to compensate for earlier reductions,” said Yokohama, noting that it secured new fitments on vehicle models in North America.

Sales also benefited from the depreciation of the yen, ‘more than offsetting’ the overall decline in automotive production and the adverse effect of Chinese lockdowns.

In the replacement segment, Yokohama said it saw growth in revenue year-on-year, in both passenger car and commercial vehicles.

Business in Japan benefited from early-year snowfalls and strong winter tire sales.

High-value-added products also lifted revenue in North America, China, and other Asian markets.

Off-highway tires, which strongly contributed to the performance of the business unit, saw strong sales to agricultural machinery and industrial machinery segments.

In Yokohama Rubber’s MB (Multiple Business) segment, revenue increased 15% to Yen68.5 billion, while business profit declined 34.5% to Yen1.7 billion due in part to the rising costs for raw materials and energy.

Here, YRC said, revenue in hose & couplings increased, driven by strong sales of hydraulic hoses for construction equipment in Japan.

Overseas sales of hose & couplings was buoyed by a recovery in the North American automotive business.

Sales for industrial materials and conveyor belts rose year-on-year, while replacement demand for aircraft fixtures and components recovered in the commercial aircraft sector.