TOKYO (May 19, 2004) — Toyo Tire & Rubber Co. Ltd. is counting on increased sales and cost-containment measures this year to help it rebuild profits eroded away last year by increased raw material costs and operating expenses.
For the year ended March 31, Toyo suffered a 43.3-percent drop in operating earnings, to $67.8 million, based on the aforementioned costs and foreign exchange losses. Sales edged up slightly to $2.26 billion, dropping the earnings/sales ratio two percentage points to 3 percent. Net earnings were up 51 percent to $48.8 million.
For fiscal 2005, Toyo is forecasting a 21-percent rebound in earnings and nearly 2 percent growth in sales despite continued increases in raw materials costs.
Toyo reported a 45.5-percent drop in tire division operating income, to $60.4 million, on 2.3-percent higher sales of $1.44 billion. Toyo is predicting 4.7 percent sales growth this year along with a nearly 4 percent improvement in operating income.
For the current fiscal year, Toyo has several initiatives underway to help it improve, including a tire plant in North America, increased production capacity at joint venture plants in China, efforts to enhance brand equity in Europe and renewed sales efforts in Japan.
Longer term, Toyo is involved in a number of projects to strengthen the company's position, including adoption of new, leaner manufacturing systems, participation in partnership with Group Michelin in the Pax run-flat tire/wheel system and development of a new generation of high-performance tires.