Tokyo-The Yokohama Rubber Co., Ltd., announced today that its operating income increased 57.2%, to 33.1 billion yen, in the fiscal year ended March 31, 2008. Underlying that increase was a 10.9% increase in net sales, to 551.4 billion yen. Yokohama posted sales gains in its Tire Group and in its Multiple Business (diversified products) Group.
Leading the sales growth were robust gains in tire markets outside Japan. The double-digit sales growth more than offset the still-rising prices for raw materials and the upward trend in logistics costs. Operating profitability also benefited from the weakening of the yen during the fiscal year.
Yokohama's net income increased 28.7%, to 21.1 billion yen. That increase occurred despite translation losses on foreign currency–denominated receivables, which resulted from the fiscal year–end appreciation of the yen, and valuation losses on investment securities. It reflected the rise in operating profitability and tax benefits associated with improved profitability in Yokohama's North American operations.
Management at Yokohama has proposed a fiscal year–end dividend of 7 yen. Together with the interim dividend of 6 yen, that would raise the annual dividend 1 yen, to 13 yen.
Operating income climbed 77.6% in Yokohama's Tire Group, to 26.0 billion yen, on sales growth of 12.6%, to 419.8 billion yen. Progress in expanding production capacity at Yokohama's tire plants in Asia supported the company's strong unit sales growth in markets outside Japan. Also contributing to the increased operating income in the Tire Group was improved profitability at subsidiaries in the United States and in Asian nations besides Japan.
In Yokohama's Multiple Business Group, operating income rose 3.6%, to 7.0 billion yen, on a 5.5% increase in sales, to 131.6 billion yen. Leading the sales growth were gains in high-pressure hoses for construction and mining equipment, in conveyor belts, and in marine fenders. Those gains occurred largely in connection with resource-development projects.
Management at Yokohama expects the worsening business environment to affect profitability adversely in the fiscal year to March 31, 2009. Prices for raw materials appear likely to continue rising, and the recent appreciation of the yen will also diminish earnings. The company's projections call for net income to decline 38.3%, to .0 billion, on a 21.5% decline in operating income, to 26.0 billion yen, and a 2.5% increase in net sales, to 565.0 billion yen.