Yokohama Rubber gains on TWS acquisition, lower costs, weaker yen

Hiratsuka, Japan – Yokohama Rubber Co. (YRC) has reported its strongest first quarter results, registering double-digit increases in both sales and business profit (earnings).

For the three months to end of March, earnings rose 91% year-on-year to just under Yen25 billion, on 23% higher sales of Yen252 billion, YRC announced 14 May.

Sales were particularly boosted by the acquisition, in May 2023, of Trelleborg Wheel Systems, now operating under Y-TWS.

The acquisition, in addition to lower cost of raw materials and logistics as well as a weakr yen drove the substantially increased earnings, YRC added.

The group’s Tire segment revenue came in at Yen226 billion, up 26.2% year-on-year, and accounting for 89.8% of the group’s consolidated sales revenue.

Segment earnings increased 86% compared to last year at Yen23.3 billion, YRC added.

OE tire sales were higher compared to last year, as price hikes and a positive forex impact from the yen’s depreciation outweighed negative impacts from lower Japanese car sales in China and reduced domestic car production.

Replacement tire sales remained flat, as increases in China, India and other Asian markets offset a decline in Japan linked to higher sales last year in advance of price hikes.

YRC's off-highway tire (OHT) business sales revenue increased sharply year-on-year, reflecting stronger demand in Europe and emerging-nation markets – helped by the addition of Y-TWS.

At the group's Multiple Businesses segment, sales grew 5.5% year-on-year to Yen23.7 billion, while segment earnings more than doubled to Yen1.3 billion.

Here, the hose & couplings business posted a year-on-year decline in revenue amid sluggish demand for hydraulic hoses for construction equipment and other applications.

Sales of automotive hoses achieved an increase, helped by higher prices in the North American market.

Revenue in the industrial products business improved on strong sales of marine products and replacement fixtures and components for commercial aircraft.

These gain were partially offset by a decline in sales of conveyor belts owing to customers’ temporary inventory adjustments.