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| | | | Yokohama Posts 3.7-Fold Increase in Interim Operating Income | | Strong earnings prompt increase in dividend | | Tokyo—The Yokohama Rubber Co., Ltd., announced today a 3.7-fold increase in interim operating income over the same period of the previous year. That result is for the six months ended September 30, 2007, the first half of the company’s present fiscal year. Profitability surged as sales growth outside Japan, especially in tires, more than offset the continuing rise in raw material costs and an increase in logistics expenses. Also contributing to the surge in profitability were price increases for Yokohama’s tire and diversified products and the weakening of the yen.
Interim operating income at Yokohama totaled 12.1 billion yen, and interim net income rose 3.9-fold over the same period of the previous year, to 13.0 billion yen. Net income benefited from a tax benefit realized in connection with improved profitability in Yokohama’s North American subsidiaries, as well as from the upturn in operating profitability. Yokohama’s interim net sales increased 13.9%, to 253.3 billion yen.
Driving the growth in profitability was a robust fiscal performance by Yokohama’s Tire Group. Interim operating income in the Tire Group increased 8-fold, to 9.0 billion yen, reflecting a 16.2% increase in sales, to 188.7 billion yen, and improved profitability at Yokohama’s subsidiaries in the United States and in Asian nations besides Japan. The sales growth occurred despite a small decline in sales of replacement tires in Japan and consisted mainly of gains in markets outside Japan.
Interim operating income in Yokohama’s Multiple Business Group increased 19.3%, to 3.0 billion yen, on a 7.7% increase in sales, to 64.6 billion yen. Leading the sales growth were gains in conveyor belts and marine fenders, largely in connection with resource-development projects.
For the full year, Yokohama retains the projections it announced on August 9. It projects full-year increases of 39.3% in net income, to 22.8 billion yen; 51.9% in operating income, to 32.0 billion yen; and 8.6% in net sales, to 540.0 billion yen.
Yokohama’s strong first-half profitability has prompted the company to raise its interim dividend 1 yen, to 6 yen. Management plans to maintain the year-end dividend at 7 yen. The annual dividend would thus rise 1 yen over the previous year, to 13 yen.
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