TOKYO (Nov. 11, 2004) — Yokohama Rubber Co. Ltd. suffered declines in operating and net profits in the first half of fiscal 2005 despite solid sales gains in its tire business.
For the six months ended Sept. 30, Yokohama reported operating earnings of $38.8 million, a 6.3 percent drop from fiscal 2004. Yokohama cited higher costs for raw materials and logistics for the decline, which dropped the earnings/sales ratio to 2.3 percent.
Net earnings fell 51.6 percent to $6.5 million as a result of inventory losses and a loss on the devaluation of securities investments. Sales rose 4.3 percent to $1.71 billion.
Yokohama said tire sales were particularly strong in Europe, the Middle East and Asia outside of Japan, leading to a 6.5-percent increase in sales to $1.22 billion and a 73-percent jump in operating income, to $31.6 million.
Sales in the multiple business group slipped 1 percent, as a downturn in golf products and conveyor belts overshadowed a favorable performance in high-pressure hoses and sealing materials, the company said. Segment operating income plummeted 68.7 percent.
For the fiscal year ending March 31, 2005, Yokohama management projects a 4.6-percent gain in sales, a 9.1-percent rise in operating income and a 3.2-percent drop in net income.