TOKYO (May 10) — Yokohama Rubber Co. Ltd.'s net profits fell 23.7 percent and operating income 4 percent for the fiscal year ended March 31, despite records sales, because of higher raw material costs and one-time tax benefits recorded in the previous year.
For fiscal 2008, Yokohama said it expects a rebound in operating income and 7-percent growth in sales.
Yokohama's net income slipped to $140 million, but the fiscal 2006 figure was artificially high because of a tax benefit related to the write-down of assets in a U.S. subsidiary, the firm said. Operating income fell to $180.3 million on a 10.1-percent increase in sales to $4.25 billion, for an operating ratio of 4.2 percent. Sales rose on the combination of higher unit sales and currency exchange gains from a weakening yen.
Yokohama´s Tire Group reported 11-percent higher sales of $3.19 billion, led by growth in Europe, Australia and other markets in Oceania and in original equipment sales in Japan. Operating earnings fell 19 percent to $125.6 million on the effects of higher raw materials costs.
The company´s Multiple Business Group reported operating income and sales increases of 7.2 and 7.3 percent, respectively.
For the current fiscal year, Yokohama management expects non-operating factors and a decline in foreign exchange gains will restrain growth in pretax income.