This sales total is the company’s highest ever, with sales growth resulting from unit sales gains and from a weaker yen, adding yen value to sales generated outside of Japan. The main increase in sales was seen in the company’s Tire Group and Multiple Business (diversified products) Group.
Operating income dropped by 4% to 21.1 billion yen (£83.4 million), a figure the company has attributed to increases in raw material costs outpacing increases in net sales, and net income declined by 23.7% to 16.4 billion yen (£68.7 million). This drop in net income reflected a tax benefit recorded in the previous year in connection with earlier write-downs of equity in a U.S. subsidiary.
The Tire Group’s sales increased 11% to 372.7 billion yen (£1.56 billion) with growth strongest in Europe and Australia plus other Oceania markets. OE sales in the company’s domestic Japanese market also increased, however replacement market sales declined in Japan due to a slump in demand for winter tyres resulting from minimal winter snowfalls. Operating income in the Tire Group declined 19.0% to 14.7 billion yen (£61.5 million) with the industry-wide scourge of surging prices for natural rubber and other raw materials the main contributory factor.
Yokohama’s projections for the year to March 31, 2008 call for net sales to increase 7.0% to 532.0 billion yen (£2.23) and for operating income to increase 35.3% to 28.5 billion yen (£119.36 million). Part of the company’s increased supply capacity will be met through expansion in production capacity at its tyre plants in Thailand and the Philippines.
