OSAKA, Japan (Nov. 15, 2007) — Toyo Tire & Rubber Co. Ltd.´s operating income in the six months ended Sept. 30 shot up by a third, but net income plunged 92.6 percent.
Toyo cited compliance problems in Japan with building construction materials as the cause for the drop.
On Nov. 9, Toyo reported safety problems with its urethane-based heat-resistant construction materials and as a result has had to withdraw them from the market. The company said in a Nov. 13 statement that the cost of replacing the materials would total about $35 million.
Toyo´s operating profits during the period rose 19.5 percent to $61.7 million, while sales rose 16.5 percent to $1.48 billion. Net income fell to $5.5 million.
The company´s tire business segment reported 33.7-percent higher operating profits during the period of $60.8 million on 23.8-percent higher sales of $1.04 billion.
Tire revenues were up primarily because of higher sales outside of Japan, mainly in North America and Europe, spurred by the continued trend of a weak yen, the company said. Domestically, sales were on par with the 2006 period, as greater sales of higher value-added products offset lower-vehicle production in Japan.