Yokohama Rubber Co. Ltd.'s North American operations posted an operating profit of $7.5 million during the six-month period ended Sept. 30, reflecting the company's efforts to reverse several years of losses.
The turnaround in North America helped Yokohama back into the black on a global basis as well; the firm posted net income of $15.7 million for the period on sales of $1.48 billion. Tire Group sales were essentially unchanged at $1.04 billion, while sales by the Multiple Business group slid 4.5 percent.
Sales in North America were up 3.9 percent to $281 million, but slow sales in Japan-particularly in the truck and bus tire aftermarket-left the 2002 corporate sales 1.3 percent behind the year-earlier period.
``The positive half year results posted by Yokohama...in North America are the result of improvements by its various operating entities, including Yokohama Tire Canada, SAS Rubber, Friend Tire and Yokohama Tire Corp.,'' said Jim MacMaster, executive vice president, business division for Yokohama Tire Corp. in Fullerton, Calif. ``The contribution by Yokohama Tire Corp. came largely through improvements in operational efficiencies and reductions in inventory carrying costs.''
The results back up the forecast the company made in its fiscal 2002 annual report-to break even in 2003, three years earlier than previously anticipated.
In fiscal 2001 (year ended March 31, 2001), Yokohama took a charge of $38.5 million to cover the write-off of Yokohama Tire Corp.'s goodwill, a move made to ``ease financial burdens for years to come.'' Last year Yokohama Tire cut its loss to $19.1 million as the U.S. unit pared down manufacturing costs and expanded sales of higher value high-performance tires.
Meanwhile, Tokyo-based Yokohoma Rubber executives are eyeing 5 percent annual sales growth through 2005 as part of their plan to achieve an operating earnings/sales ratio of 8 percent.
The targets are spelled out in the company's ``1-5-8 financial goals'' strategy for the coming three years: asset turnover of 1 percent, annual sales growth of 4.8 percent and an operating ratio of 7.6 percent.
Specifically, Yokohama said it hopes to reach $3.74 billion in sales and post more than $28 million in operating earnings.
The goals are part of a corporate grand design strategy, which was devised by forecasting changes in lifestyle, society, automotive industry and other key factors for the next 10 years, Yokohama said. The company wants its business to be driven by strong brand power.
To achieve its goals, Yokohama plans to increase tire exports, set up more manufacturing bases in Asian countries outside of Japan and enhance original equipment supply activities with Japanese car makers' global operations.
Concurrently, Yokohama will work to further enhance its performance tire image on the passenger/light truck tire side while also rolling out new ``world-level'' products for trucks and buses.
In the non-tire Multiple Business Group, Yokohama will strive to renew its product range, expand businesses already ranked No. 1 or 2 in market share, emphasize business activities in China and North America and establish an as-yet-unidentified new business unit.
In its research and development area, Yokohama intends to upgrade its capabilities in materials, analytical simulation and process technologies under the theme, ``superior function, safety and environmental friendliness.''