Tokyo-The Yokohama Rubber Co., Ltd., announced today that its sales in the first half of the present fiscal year increased 17.9% over the same period of the previous fiscal year, to 238.3 billion yen. Yokohama posted interim operating income of 8.3 billion yen and interim net income of 1.2 billion yen, compared with an operating deficit of 2.4 billion yen and a net deficit of 3.9 billion yen in the first half of the previous fiscal year. These figures are for the six months to September 30, 2010, the first half of the fiscal year to March 31, 2010.
Leading Yokohama's business upturn was strong sales growth in tires, in high-pressure hoses, and in sealants. That growth more than offset the adverse effect on earnings of rising prices for raw materials and the appreciation of the yen. Earnings further benefited from rises in capacity utilization rates and from Yokohama's progress in cost-cutting programs.
Sales in Yokohama's tire operations increased 18.5% over the first half of the previous fiscal year, to 184.9 billion yen, and interim operating income totaled 6.1 billion yen, compared with an operating deficit of 2.5 billion yen in the first half of the previous fiscal year. Business was especially robust in the United States and in China, notwithstanding the challenge posed by the strengthening yen. Yokohama also recorded sales growth in Japan, both in the original equipment market and in the replacement market.
In Yokohama's industrial products business, sales increased 24.2% over the first half of the previous fiscal year, to 41.4 billion yen, and interim operating income totaled 1.6 billion yen, compared with an operating deficit of 183 million yen in the first half of the previous fiscal year. That business centers on high-pressure hoses, sealants and adhesives, conveyor belts, anti-seismic rubber-and-steel fittings for protecting structures from earthquakes, marine hoses, and marine fenders. The sales and earnings gains in those operations in the fiscal first half reflected vigorous growth in high-pressure hoses for construction equipment and in automotive window sealants.
Sales in other products, including aircraft products and golf products, declined 5.2% from the first half of the previous fiscal year, to 12.0 billion yen, and operating income increased 74.0%, to 611 million yen. Business in aircraft products expanded, led by gains in replacement lavatory units and other products for commercial airliners. More than offsetting that expansion was a sales decline in golf products.
Yokohama projects that net sales will increase 11.5% in the fiscal year to March 31, 2011, to 520.0 billion yen; that operating income will increase 18.9%, to 25.5 billion yen; and that net income will increase 0.1%, to 11.5 billion yen. The projection for operating income is 41.7% higher and that for net income 43.8% higher than the projections released by Yokohama on May 12, 2010. Yokohama has retained the earlier projection for net sales, as the appreciation of the yen appears likely to offset unit sales growth. The heightened earnings expectations reflect progress in expanding sales volume and in trimming costs.