Tokyo-The Yokohama Rubber Co., Ltd., announced today that it posted net income of 9.0 billion yen in the first three quarters of the present fiscal year, the nine months ended December 31, 2009. That compares with net income of just 222 million yen in the same period of the previous fiscal year. Underlying the rebound in net income was a 0.1% increase in operating income, to 17.3 billion yen. The improvement in profitability occurred despite a 16.2% decline in net sales, to 344.0 billion yen, and reflected a downward trend in raw material prices, reductions in selling and other expenses, and smaller losses on currency translation.
Sales declined 14.6% in Yokohama's Tire Group, to 272.8 billion yen, and 22.0% in the company's Multiple (diversified) Business Group, to 71.2 billion yen. The sales decline in the Tire Group reflected weak sales in Yokohama's largest markets, Japan and North America, and occurred despite sales gains in China and Russia. Weak demand undercut sales in the Multiple Business Group, especially in high-pressure hoses and in conveyor belts. Affecting sales adversely in both groups was the appreciation of the yen against the U.S. dollar and against the euro.
Operating income increased 18.0% in Yokohama's Tire Group, to 16.8 billion yen. That increase occurred as declining raw material prices and cost reductions more than offset the effect of lower sales. In the Multiple Business Group, operating income declined 86.3%, to 495 million yen. That decline reflected the appreciation of the yen, as well as the decrease in sales.
Management at Yokohama abides by the fiscal projections it released in October 2009 for the full fiscal year to March 31, 2010. Those projections call for net income to total 7.0 billion yen, compared with a net loss of 5.7 billion yen in the previous fiscal year; for operating income to increase 32.7%, to 17.0 billion yen; and for net sales to decline 10.1%, to 465.0 billion yen.