Yokohama Rubber Co. has posted net income of 1.6 billion yen ($18.455 million) in the first quarter compared with a net loss of 1.8 billion yen in the same period of the previous fiscal year.
That result is for the three months from April to June, the first quarter of the company’s fiscal 2011 (Apr. 1, 2010 to Mar. 31, 2011). Yokohama’s net sales climbed 23.4% over the same quarter of the previous fiscal year, to 117.4 billion yen.
According to the company, the return to net profitability was driven by a strong turnaround in operating profitability. The company posted operating income of 5.9 billion yen in the fiscal first quarter, compared with an operating loss of 4.1 billion yen in the same period of the previous fiscal year.
Strong unit sales growth of tires, buoyed by global economic recovery, led Yokohama’s gains in sales and earnings. Profitability improved as an upturn in capacity utilization and progress in cutting costs more than offset the adverse effects of rising raw material costs and the appreciation of the yen.
Operating income in Yokohama’s tire operations totaled 5.3 billion yen ($61.121 million), up from a first-quarter loss of 3.7 billion yen in fiscal 2010. According to the report, group tire sales rose 25.5%, to 92.6 billion yen. Yokohama’s domestic tire unit sales are said to have increased in the replacement market and in the OE market, and the company also posted unit sales gains in overseas tire markets, led by growth in North America and in Asia.
Looking forward, Yokohama is predicting operating income to total 4.0 billion yen in the first half of fiscal 2011 (through September 2010). That compares with an operating loss of 2.4 billion yen in the same period of the previous year.
Underlying the projected upturn in operating profitability is projected sales growth of 17.8%, to 238.0 billion yen. The projections call for Yokohama’s interim net loss to shrink 64.1% from the first half of fiscal 2010, to 1.4 billion yen. According to the company, non-operating losses associated with the strengthening yen appear likely to prevent a return to net profitability in the fiscal first half. (Tyres & Accessories)
