Yokohama Rubber reports record first-half financial results

On 9 August, The Yokohama Rubber Co., Ltd. announced its financial performance for the first half of fiscal 2024, publishing results that necessitate an upward revision of full-year earnings projections. The company’s sales revenue for the period, which spanned January to June 2024, surged by 18.5 per cent year-on-year to a record ¥525.3 billion (£2.81 billion). Business profit climbed 113.4 per cent to ¥54.6 billion (£292.4 million), operating profit increased by 99.6 per cent to ¥56.3 billion (£301.7 million) and profit attributable to owners of parent grew by 68.3 per cent to ¥46.6 billion (£249.9 million). These figures mark the highest-ever first-half performance in Yokohama Rubber’s history.

These financial results reflect strong performance across Yokohama Rubber’s main business segments, bolstered by a favourable operating environment. The company benefited from declining raw material costs, reduced logistics expenses, and a weakened yen against major currencies, all of which contributed positively to profitability.

Tire segment driving rising sales

Yokohama Rubber’s Tire business segment was a key contributor to the company’s robust performance, generating H1 2024 sales revenue of ¥469.6 billion (£2.52 billion), a 20.6 per cent increase compared to the same period in fiscal 2023. This segment accounted for 89.4 per cent of the company’s total sales revenue. Within the Tire segment, original equipment tyre sales were higher than the previous year, driven by easing production constraints among Japanese automakers and favourable currency exchange effects.

The replacement tyre market also showed strong growth, with higher domestic sales fuelled by aggressive marketing strategies for new products. Internationally, sales were particularly robust in Europe, India, and other Asian markets. Yokohama Rubber’s off-highway tyre (OHT) business also posted a year-on-year increase in sales revenue, underpinned by strong performance in Europe and the Middle East, as well as contributions from Y-TWS (formerly Trelleborg Wheel Systems).

Multiple Business segment sees steady growth

Yokohama Rubber’s Multiple Business (MB) segment, which includes industrial products, hoses, and marine products, reported sales revenue of ¥51.6 billion (£276.4 million), up 5.1 per cent year-on-year. This segment contributed 9.8 per cent to the company’s consolidated sales revenue. Within the MB segment, the industrial products division, which includes conveyor belts and marine hoses, saw revenue growth driven by price hikes in Japan and strong demand in overseas markets. The hose and couplings business maintained stable sales despite sluggish demand for hydraulic hoses used in construction equipment, thanks to price increases and robust sales efforts in the North American market.

Strategic upward revision of full-year projections

Buoyed by its strong first-half performance, Yokohama Rubber has revised its full-year projections for fiscal 2024 upwards. The company now expects sales revenue to reach ¥1,105.0 billion (£5.92 billion), a 4.2 per cent increase over its previous forecast. Business profit is projected to rise by 11.7 per cent to ¥128.5 billion (£688.6 million), while operating profit is anticipated to be ¥116.0 billion (£621.8 million), up 0.4 per cent from earlier projections. Additionally, profit attributable to owners of parent is expected to grow by 5.4 per cent to ¥78.5 billion (£420.7 million).

Medium-term plan YX2026 revised for ambitious growth

The company has also adjusted its medium-term management plan, Yokohama Transformation 2026 (YX2026), to reflect its recent performance and the strategic acquisition of Goodyear’s off-the-road (OTR) tyre business. Initially, YX2026 set financial targets for fiscal 2026 at ¥1,150 billion in sales revenue, ¥130 billion in business profit, and an 11 per cent business profit margin. However, in light of its recent results and the anticipated benefits from technological and production advancements, Yokohama Rubber has revised these targets upwards.

The new targets for fiscal 2026 are ¥1,250 billion in sales revenue, a ¥100 billion increase, and ¥150 billion in business profit, an increase of ¥20 billion. The company has also raised business profit margin target to 12 per cent. Yokohama Rubber aims to achieve significant growth through the exploitation of its existing business strengths and the exploration of new value, continuing the transformation initiated in its previous medium-term plan.

Outlook

Looking ahead, Yokohama Rubber remains focused on achieving its revised financial targets through strategic initiatives and continued operational excellence. The company is determined to maintain its trajectory of growth, aiming for “Hockey Stick Growth” in the YX2026 plan’s final year, leading into fiscal 2027.

Read or download further information about Yokohama’s H1 2024 financial results here.