TOKYO — Yokohama Rubber Co. Ltd. reported an eightfold increase in business profit for the quarter ended March 31 on record sales revenue of $1.41 billion.
Yokohama attributed its rebound from the COVID-19 pandemic-influenced fiscal 2020 first quarter to higher replacement tire market sales in most markets and record sales by its ATG off-highway tire segment.
The first-quarter results — business income of $137 million on 15.9% higher sales of $1.41 billion — prompted the company to revise upward its projections for the first half and the full fiscal year.
YRC now projects full-year sales revenue of $6 billion (at prevailing exchange rates), up 3.2% over the February forecast and 12% higher than the 2020 full-year figure, but still slightly shy of the fiscal 2019 sales. Business profit should come in at approximately $475 million, or nearly 8% of sales.
The first quarter net result was a profit of $262.5 million, versus a net loss a year ago.
By region, Yokohama said revenue in the quarter increased 36% in Asia, 29% in China, 27% in Europe and 14% in North America over the 2020 quarter.
Revenue in YRC's tire business unit increased 16% to $956.7 million, which helped return the unit to the black with operating profit of $87.6 million, for an operating ratio of 9.2%. The 2021 revenue was 1.3% higher than that reported in the fiscal 2019 first quarter.
YRC said replacement market revenue rose both domestically and overseas — due in part to "vigorous promotion" of high value-added products — while OE business growth in China offset declines in Japan and North America.
In Europe, YRC acquired Polish tire distributor ITR CEE Spółka, which it described as a wholesale distributor engaged in the import and sale of Yokohama tires in central and eastern Europe.
YRC's ATG off-highway tire unit's operating profit nearly doubled to $33 million on 45% higher sales of $212.7 million, resulting in an operating ratio of 15.5%.
Yokohama's mid-term strategy calls for a full integration of the off-highway tire businesses of YRC and its Alliance Tire Group and Aichi Tire units, resulting in a multi-brand approach to market development and responsiveness to customer needs.
At the same time, YRC disclosed it has sold its headquarters building in central Tokyo and is preparing to shift headquarters functions to its factory in Hiratsuka, in Kanagawa Prefecture, about 35 miles southwest of Tokyo.