A number of factors led to sales and income declining at Yokohama Rubber Co., Ltd. in the first quarter of 2016. The Japanese manufacturer reports that decreased vehicle production in Japan, lower global tyre prices and yen appreciation more than offset the benefit brought by cheaper raw materials. This was reflected in a 6.8 per cent year-on-year drop in net sales, which amounted to ¥129.3 billion (£822.4 million) in the three months to 31 March 2016. Sales within Yokohama Rubber’s tyre segment fell 6.9 per cent to ¥100.8 billion (£641.0 million).
In terms of unit volumes, the tyre maker suffered a setback in the Japanese original equipment market while increasing volumes year-on-year in Japan’s aftermarket and outside of its domestic market. The company reports that strong sales of winter tyres in Europe last year “carried over into sales momentum in summer tyres in early 2016.”
Operating income, at ¥6.8 billion (£43.7 million), was 42.0 per cent lower than in the first quarter of 2015; tyre segment operating income was 41.9 per cent below that of a year earlier and amounted to ¥5.4 billion (£35.7 million). Profit attributable to owners of parent declined 37.9 per cent to ¥3.6 billion (£23.0 million).
Publication of Yokohama Rubber’s Q1 2016 results was accompanied by a confirmation that the company is maintaining the first-half and full-year fiscal projections for 2016 it announced in February. Those projections call for profit attributable to owners of parent to decline 16.8 per cent in the first half, to ¥13.5 billion (£85.8 million), on a 13.1 per cent decline in operating income, to ¥22.0 billion (£139.9 million), and a 1.2 per cent increase in net sales, to ¥300.0 billion (£1.9 billion). For the full year, they call for profit attributable to owners of parent to decline 6.4 per cent, to ¥34.0 billion (£216.2 million), a 0.9 per cent increase in operating income, to ¥55.0 billion (£349.7 million), and a 3.5 per cent increase in net sales, to ¥652.0 billion (£4.1 billion).
Yokohama Rubber announced in March 2016 that it would purchase all shares in Netherlands-based tyre manufacturer Alliance Tire Group B.V. The company says it will release updated fiscal projections when it has calculated the probable effect the acquisition will have upon its fiscal performance.
Further information about Yokohama Rubber’s Q1 2016 and past results can be found in our company profiles and reports section.
Category: Company News