Sales revenue for Yokohama Rubber Co., Ltd. declined 12.3% from the previous year, to 570.6 billion yen (about $5.41 billion), according to the company’s financial results for fiscal year 2020 (January to December 2020). In addition, business profit declined 26.6%; operating profit declined 37.8%; and profit attributable to owners of parent declined 37.3%.
Yokohama says it reversed the downward trend in earnings in the fourth quarter (October to December) and posted record-high October-December figures for business profit, operating profit and profit attributable to owners of parent. The company says the upturn in profitability reflected improvements in the company’s structure of earnings, including reductions in fixed costs and an overall improvement in production costs. The upturn in profitability also reflected the successful tailoring of marketing to regional circumstances and to trends in demand, increased production output, and strong Japanese sales of winter tires.
In Yokohama’s tires segment, full-year sales revenue and business profit were down from the previous year, but original equipment business in Japan displayed gradual improvement in the fiscal second half, and full-year sales in China increased over the previous year. Yokohama says it worked to buttress sales in replacement tires through the promotion of high-value-added products and other stratagems, and sales of winter tires were robust in the fourth quarter. The COVID-19 pandemic affected business severely in the fiscal first half, however, and full-year sales declined in original equipment tires and in replacement tires.
Business in Yokohama’s ATG segment suffered from the adverse effect of COVID-19 pandemic on demand worldwide. The ATG segment comprises business in off-highway tires for agricultural machinery, industrial machinery, and other applications. Signs of a recovery appeared in replacement demand for agricultural equipment tires, and ATG sales revenue were higher in the second half than in the same period of the previous year, Yokohama says.
The COVID-19 pandemic continues to weigh on business performance in 2021, but demand is recovering in some regions, the company says. Yokohama’s full-year fiscal projections for 2021 call for sales revenue of 620.0 billion yen (about $5.88 billion), up 8.7% over the previous year; business profit up 35.9%; operating profit up 38.7%; and profit attributable to owners of parent up 31.1%.