Yokohama reports record first quarter operating income
Yokohama Rubber says its operating income in the first quarter of 2015 was its “highest first-quarter result ever.” The Japanese manufacturer achieved a 1.0 per cent increase in operating income to 11.8 billion yen (£62.9 million) on a 0.9 per cent decline in net sales to 138.7 billion yen (£739.3 million). This gave the company an operating margin of 8.5 per cent. Net income dropped 10.1 per cent to 5.8 billion yen (£30.9 million).
Within the company’s tyre segment, overseas sales compensated for a decline in sales within Japan, resulting in an overall increase in sales. Operating income increased 0.5 per cent in the tyre segment to 9.3 billion yen (£49.6 million) on a 1.1 per cent decline in sales to 108.2 billion yen (£576.8 million). Sales of original equipment tyres declined in Japan amid falling vehicle unit production. In the Japanese replacement tyre market, Yokohama’s sales declined in both yen value and unit volume, declines that reflected a surge in purchasing in the first quarter of last year and lighter snowfalls than in the previous year. The first-quarter spike in purchasing in 2014 occurred in advance of the 1 April rise in Japan’s national sales tax, and the lighter snowfalls in the winter of 2015 meant lower demand for winter tyres. Overseas gains in yen value and unit volume occurred due to strong sales in China and Russia more than offsetting weakness in North America and in Europe.
Net income projections for the six months to 30 June 2015 are for a 41.5 per cent year-on-year decline to 10.5 billion yen (£56.0 million) on a 1.8 per cent increase in operating income to 24.0 billion yen (£127.9 million), and an 8.1 per cent increase in net sales to 307.0 billion yen (£1.6 billion). Yokohama Rubber adheres to the full-year projections for sales and earnings it announced in February. Those projections call for net income to decline 11.1 per cent to 36.0 billion yen (£191.9 million) on an 8.4 per cent increase in operating income to 64.0 billion yen (£341.1 million) and a 7.6 per cent increase in net sales to 673.0 billion yen (£3.6 billion).
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