Tokyo—The Yokohama Rubber Co., Ltd., posted a 10.2% increase in net sales, to 367.8 billion yen, in the nine months ended December 31—the first three quarters of the present fiscal year. That increase is in comparison with the same period of the previous year. Sales increased in Yokohama's Tire Group and in its Multiple Business (diversified products) Group, led by unit sales growth and amplified by the weakening of the yen. Operating income declined 18.3%, to 17.1 billion yen, because of rising raw-material costs. Net income declined 29.8%, to 13.7 billion yen. That decline reflects the decline in operating income and a tax benefit recorded in the same period of the previous year in connection with earlier write-downs of equity in a U.S. subsidiary.
Sales increased 11.2% in Yokohama's Tire Group, to 276.4 billion yen, led by gains in Europe and in Oceania. Yokohama also posted growth in sales of tires in Japan. Strong growth in shipments to automakers more than offset weakness in sales of winter tires caused by Japan's warmer-than-average winter. Operating income in the Tire Group declined 29.9%, to 12.9 billion yen, because of rising prices for natural rubber and for other raw materials. In Yokohama's Multiple Business Group, sales increased 7.3%, to 91.4 billion yen, led by gains in high-pressure hoses, marine hoses, and aircraft products. Operating income in the Multiple Business Group rose 84.2%, to 4.6 billion yen, largely because of greatly improved profitability in aircraft products.
Management has raised the full-year fiscal projections that it announced on November 9, 2006. It now projects that net sales will rise 9.5%, to 495.0 billion yen—0.8% higher than in the earlier projection; that operating income will decline 2.0%, to 21.5 billion yen—2.4% higher; and that net income will decline 25.4%, to 16.0 billion yen—39.1% higher. The yen appears likely to be weaker on average for the full year than management had assumed. In addition, the rise in prices for natural rubber and for other raw materials has subsided somewhat and appears likely to be smaller for the full year than management had assumed. Also prompting the upward revision in Yokohama's earnings projections is a gain on a formerly unscheduled sale of investment securities.
To mark Yokohama's 90th anniversary on October 13, 2007, management has proposed a two-yen commemorative dividend. That commemorative dividend, together with a proposed ordinary year-end dividend of 6 yen and the ordinary interim dividend of 4 yen, would increase the annual dividends 2 yen, to 12 yen. The proposed year-end dividends are subject to approval at the general meeting of shareholders and would be payable to shareholders of record at March 31, 2007.