OSAKA, Japan (Nov. 14, 2007) — Toyo Tire & Rubber Co. Ltd.'s operating income in the six months ended Sept. 30 shot up by a third, but net income plunged 92.6 percent as a result of compliance problems in Japan with building construction materials.
On Nov. 9, Toyo reported safety problems with its urethane-based heat-resistant contruction materials and as a result has had to withdraw them from the market. The company said in a Nov. 13 statement that the cost of replacing the materials would total around $35 million.Toyo's operating profits during the period rose 19.5 percent to $61.7 million, while sales rose 16.5 percent to $1.48 billion. Net income fell to $5.5 million.
The company's tire business segment reported 33.7-percent higher operating profits during the period of $60.8 million on 23.8-percent higher sales of $1.04 billion.
Tire revenues were up primarily due to higher sales outside of Japan, mainly in North America and Europe, spurred by the continued trend of a weak yen, the company said. Domestically, sales were on par with the 2006 period, as greater sales of higher value-added products offset lower vehicle production in Japan.