Yokohama Rubber reports strong growth in annual sales, earnings

Hiratsuka, Japan – Yokohama Rubber Co. (YRC) has posted a strong set of annual results, with both sales and business profit up by double-digit percentages.

For the year ended 31 Dec 2023, YRC posted a 41.4% year-on-year increase in business profit to Yen99 billion, on 14.5% higher sales of Yen985 billion.

The Japanese group also hit its target to achieve an ‘above 10%’ target profit margin at the end of the three-year transformation (YX2023) plan, said its 16 Feb statement.

YRC’s tires segment, which also includes the off-highway tires (YOHT) and former Trelleborg’s tire operations (Y-TWS), saw sales rise 16% to Yen875 billion – including a Yen103 billion contribution by Y-TWS.

Segment business profit rose 37% year-on-year to Yen92 billion, also reflecting a Yen1.8 billion contribution by Y-TWS.

The passenger car tires segment posted a “strong sales and earnings performance” in 2023, helped by the promotion of high-value-added products, said YRC.

These products included the group's flagship Advan brand tires and Geolandar tires for SUVs and pickup trucks.

Improvements in product-mix, price increases, declines in raw materials and logistics costs, and a weaker yen further contributed to enhanced margins.

YRC said it expanded business in the OE segment in Japan and North America, “more than offsetting continuing weakness in Japanese automakers’ sales in China.”

Furthermore, the group reported growth in the replacement market, with robust summer tires demand in Japan as well as other overseas markets such as China and India.

By contrast, Yokohama’s off-highway segment reported mixed results between the two YOHT and Y-TWS operations.

As a whole, YRC said its off-highway operations saw “a large increase” in sales revenue in off-highway tires for agricultural machinery, industrial machinery, and other applications.

Sales, however, declined “in the legacy business of YOHT” which the company handled as the ATG (Alliance Tire Group) segment prior to 2022.

The unit reported lower year-on-year results, with business profit down 22% year-on-year to Yen17.5 billion, on 15% lower sales of Yen132 billion.

That decline, YRC said, occurred “on account of continuing adverse conditions in the European and North American markets”.

The overall sales increase in the off-highway tires reflected the acquisition, completed in May 2023, of the Swedish company Y-TWS.

In the industrial rubber ‘multiple business’, sales were up 6% year-on-year to Yen102 billion, while business profit rose by more than 77% to Yen7.1 billion.

Volumes in hose & couplings remained unchanged from the previous year.

Weak sales of hydraulic hoses for construction equipment and other applications, offset North American sales growth in automotive hoses.

Sales increased strongly in industrial products, as the Japan-based group posted robust growth in conveyor belts, marine products and replacement fixtures for commercial aircraft.

For 2024, YRC expects to deliver a 7.6% year-on-year increase in sales to Yen1,060 billion and a 16.0% increase in business profit to Yen115.0 billion.