TOKYO (May 12, 2009)—Yokohama Rubber Co. Ltd. had a net loss of $56.2 million in the fiscal year ended March 31 on a 6.2-percent decline in sales and 61.3-percent falloff in operating income.
The poor results won't stop the firm from pursuing its goal of achieving 7-percent operating/sales ratio by 2011, part of Yokohama's Grand Design 100 corporate strategy.
The Japanese tire maker blamed the results on lower sales, the appreciation of the yen, productivity declines associated with slumping demand and the continuing upward trend in raw material costs. Operating income fell to $127.4 million and sales to $5.15 billion.
Despite the loss and economic malaise, Yokohama management projects a return to the black and a rebound in operating income for fiscal 2010, based on an expected decline in raw material costs. The firm's sales for the year ending next March 31 will fall about 5 percent shy of the fiscal 2009 sales.
The company said its Tire Group's operating income fell 62 percent to $98.4 million on 4.8 percent lower sales of $3.98 billion, because of sales declines both domestically and internationally.
Yokohama's operations in North America reported a 39.9-percent drop in operating income to $40.2 million as sales slipped 10 percent to $1.01 billion.
The company is counting on its Tire Group to be the main source of the growth for Phase II of its growth strategy. Plans are in place to expand the firm's presence in the global marketplace through new and upgraded overseas production capacity and by integrating regional operations to support increased globalization.
Yokohama's operating ratio fell to 2.5 percent for the year ended March 31 from 6 percent the year before and is expected to rise to only 3.5 percent for the current year.
Grand Design 100 was launched in April 2006 and calls for achieving annual net sales of 1 trillion yen and annual operating income of 100 billion yen by the fiscal year ending March 31, 2018 globally and asserting strengths in environmental technologies to develop business in renewable energies and in other new product sectors.