Yokohama Sales & Earnings Decline in H1
Yokohama Rubber has reported a year-on-year 21.3 per cent drop in sales during the first half of the financial year. Upon announcing sales in the six months to September 30, 2009 amounting to 202.1 billion yen (£1.4 billion), the company noted that demand in its principal markets – Japan, North America and Europe – had weakened. Slackening demand also undermined sales volume in Yokohama’s Multiple Business (diversified products) Group, which posted sales declines in high-pressure hoses, in conveyor belts, in sealants, and in aircraft products.
The company reported an interim operating loss of 2.4 billion yen (£16.2 million), compared with operating income of 5.6 billion yen in the first half of the previous fiscal year, and a net loss of 3.9 billion yen (£26.3 million), compared with interim net income of 554 yen million in the previous fiscal year. Profitability suffered from the decline in sales and, especially in tyres and in high-pressure hoses, from deteriorating productivity caused by shrinkage in unit sales volume. Profitability also suffered from the appreciation of the yen against the US dollar and the euro. Those adverse trends more than offset Yokohama’s cost reduction efforts.
In Yokohama’s Tire Group, sales declined 19.5 per cent from the first half of the previous fiscal year to 156.0 billion yen (£1.1 billion), and the group posted an operating loss of 2.5 billion yen (£16.9 million), compared with operating income of 3.2 billion yen in the previous first half. Sales in Yokohama’s Multiple Business Group declined 26.7 per cent from the first half of the previous fiscal year, to 46.0 billion yen (£310.6 million), and the group posted a 93.6 per cent decline in operating income, to 174 million yen (£1.2 million). According to Yokohama, the downturns in the Tire Group and Multiple Business Group’s profitability reflected a decline in sales, declines in capacity utilisation rates, and the yen’s appreciation.