TOKYO — Yokohama Rubber Co. Ltd. posted record operating income and sales for the six months ended June 30, prompting management to declare the company is abiding by the full-year fiscal projections it published in February.
For the first half of fiscal 2018, Yokohama posted a 32.3-percent increase in operating earnings to $242.6 million on 1.8-percent higher sales of $2.85 billion, raising the operating ratio two points to 8.5 percent.
YRC cited raw materials, exchange rate differences and the price/mix factor as reasons for the earnings improvement. Combined, these offset negatives such as lower tire unit sales volume and higher fixed costs.
On the revenue side, YRC attributed the relatively low growth to reduced overseas replacement tire market sales, which were a reflection of a sales surge in the same period of fiscal 2017 in advance of announced price hikes.
Otherwise, tire division sales revenue increased in the OE sector, both domestically and overseas, as increased sales of higher value-added products offset a drop in vehicle production in Japan. Domestic replacement sales were up, led by strong demand for winter tires, YRC said.
Tire Division operating income jumped 10 percent to $144.3 million on 0.6-percent lower revenue of $1.97 billion, raising the operating ratio to 7.3 percent.
The Alliance Tire Group off-road tire business reported a 16.9-percent rise in operating income to $39.5 million on 10-percent higher revenue of $144.3 million. Sales were buoyed by gains in the OE business and a recovery in demand for agricultural machinery, YRC said.
As stated, YRC is sticking with its earlier fiscal 2018 forecast, which calls for modest improvements in sales and earnings over fiscal 2017