TOKYO — Yokohama Rubber Co. Ltd. posted double-digit gains in operating income and sales for the six months ended June 30, based on strong domestic and overseas demand and the first-time inclusion of results from Alliance Tire Group (ATG).
Operating income rose 16.8 percent to $163.3 million on 15.9-percent higher sales of $2.77 billion, leaving the operating ratio unchanged at 5.9 percent. Net income rose 38.7 percent to $101.6 million.
Earnings benefited from the sales increases, from tire price increases YRC instituted in Japan in April and also from the weakening of the yen vs. other currencies.
Those positive factors more than offset the adverse earnings effect of elevated raw materials prices.
Yokohama's tire segment reported an 8.9-percent increase in operating income to $117 million on 6.4-percent higher sales of $1.97 billion.
YRC noted strong growth in OE sector demand, especially in China, North America and Russia. Business in the replacement sector increased in both unit volume and value.
Yokohama posted replacement sales gains domestically and overseas, supported by recovering demand in Russia and reflecting strong sales in North America and in Europe.
The ATG segment reported operating income of $13.3 million on sales $269.6 million, as the OTR market exhibited signs of recovery and sales met management's expectations. Global weakness in grain prices weighed on demand for agricultural tires, however.
The positive first-half results and favorable market conditions prompted management to revise upward its full-year forecast from February 2017. The revised projection calls for operating income of about $445 million, a 5.3-percent increase over the earlier projection.