TOKYO — Yokohama Rubber Co. Ltd. (YRC) reported a lower business profit for the fiscal year ended Dec. 31, dragged down by double-digit decline in earnings by the tire division.
Business profit fell 15.4% to $460.8 million due to higher production and fixed costs, exchange rate conversion losses and an unfavorable price/mix component, the company said. Sales essentially were unchanged at $5.8 billion.
Operating and net earnings were up, however, on the positive effects on the sale of some fixed assets and a corporate tax-reduction in India.
For fiscal 2020, YRC is calling for a rebound in business profit of nearly 10% and a 1.5% gain in sales revenue. Operating and net earnings, though, likely will decline.
YRC's tire business suffered a 27.3% drop in operating income to $282.7 million on 0.7% lower sales revenue of $4.15 billion, dropping the operating ratio 2½ points to 6.8%. Yokohama attributed the setback to increased logistics expenses, the appreciation of the yen versus the dollar and lower sales.
Yokohama cited reduced business in the original equipment sector in Japan and most overseas markets, except North America, for the drop in sales.
Replacement market sales, by contrast, were strong in most markets, although consecutive warm winters in Japan hurt the domestic winter tire sales.
Yokohama's ATG off-highway tire segment reported a 23% improvement in operating income to $95.6 million on 3.5% higher sales of $660 million.
YRC did not disclose at this time results by geographic region.