Tokyo—The Yokohama Rubber Co., Ltd., today announced its consolidated results for fiscal year 2003, ended March 31, 2003. Net sales increased 0.2%, to 400,448 million yen. Operating income was up 2.1%, to 23,184 million yen. Net income surged 37.8%, to a record 10,144 million yen. During the term, the European, U.S., and Asian economies performed solidly, although the Iraq crisis created increasing instability. Conditions in the Japanese economy remained very adverse, reflecting stagnant personal consumption and private sector capital investment. Against this backdrop, Yokohama Rubber strove to reinforce its foundations through Grand Design 10, a blueprint founded on the guiding principles of growth, production innovations, and globalization. At the same time, its brought out a line of high-performance products, strengthened its domestic and international sales structures, and endeavored to reduce costs.

Sales of the Tire Group rose 1.0%, to 286,987 million yen. That group's operating income advanced 10.8%, to 17,264 million yen. The Tire Group accounted for 71.7% of net sales. The Company pursued aggressive marketing of original equipment tires during the year to take advantage of rising domestic auto production, thus boosting sales volumes and value from the previous term. Sales volume and value of replacement tires were down slightly owing to a decline in demand that overshadowed the introduction of many new passenger car, truck, and bus tires. The volume and value of export tires improved from the previous year, reflecting particularly favorable performances in Asia and Europe as a result of country-specific marketing initiatives. Internationally, the Yokohama Tire Corporation in the United States expanded sales of Yokohama brand tires and greatly enhanced its revenues and earnings by bolstering its distribution efficiency and its financial position. Yokohama Tire Philippines, Inc., also delivered better sales and profits on the strength of productivity advances.

Sales of the Multiple Business Group were down 1.8%, to 113,461 million yen, with group operating income dropping 13.4%, to 6,328 million yen. The group represented 28.3% of net sales. Sales were solid for high-pressure hoses, marine hoses, adhesives, and automotive sealing materials, but demand for conveyor belts and antiseismic rubber bearings for bridges were at a low ebb owing to customers reductions in capital spending. Sales of golf products were strong in the second half of the term as a result of the launches of new drivers and irons, although full-term sales were down slightly from a year earlier in this category. The aircraft components business dropped amid a decrease in demand, as aircraft production fell in the aftermath of the terrorist strikes in the United States in September 2001. Overseas, hose production subsidiary SAS Rubber Company boosted its sales to American automakers, while YH America, Inc., achieved steady revenue growth in hoses fitted with metal couplings and automotive sealants.

For fiscal year 2004, management projects net sales of 410 billion yen, up 2.4%, and net income of 10 billion yen.