Tokyo-The Yokohama Rubber Co., Ltd., today announced its consolidated results for the first half of fiscal 2004 (April 1, 2003-March 31, 2004). The high value of the yen and sluggishness in the market for replacement tires in Japan led to an overall decline in Yokohama's tire sales, but sales of hydraulic hoses and golf products increased. As a result, consolidated net sales slipped 0.1%, to ¥182.0 billion. Operating income fell 15.9%, to ¥4.6 billion, primarily owing to an increase in the selling, general and administrative expenses, though a rise in raw materials prices was offset mainly by successful cost-cutting measures. Net income decreased 23.0%, to ¥1.5 billion, in part because of a decrease in gains from sales of fixed assets.
Sales of the Tire Group amounted to ¥127.1 billion, a 0.8% slide, and operating income decreased 27.5%, to ¥2.0 billion. Demand in the Japanese market fell considerably, as both unit- and value-based sales of replacement tires contracted. Sales of tires on an original equipment basis were basically unchanged. On the other hand, export sales were favorable; both unit- and value-based sales rose, particularly in Europe, Asia, and Oceania.
Sales of the Multiple Business (MB) Group expanded 1.6%, to ¥54.9 billion, but operating income declined 12.4%, to ¥2.6 billion. Sales were favorable for hydraulic hoses, marine hoses, and sealing materials for buildings. There were also significant gains in golf products owing to the strong popularity of the DUO series of golf clubs. However, decreased public works investment led to a drop in sales of antiseismic rubber bearings for bridges. In addition, demand for Yokohama's aircraft components remained sluggish in the aftermath of the terrorist attacks in the United States in 2001, the war in Iraq and the outbreak of Severe Acute Respiratory Syndrome (SARS).
Reflecting the current operating environment and these results, in fiscal 2004 Yokohama forecasts consolidated net sales of ¥400.0 billion, a 0.1% decrease, and net income of ¥10.0 billion, a 1.4% decrease.