The Yokohama Rubber Co., Ltd., announced today its business and financial results for the first half (January to June) of fiscal 2023. Profit attributable to owners of parent increased 18.8% over the same period of the previous year, to 27.7 billion yen, on a 4.6% increase in operating profit, to 28.2 billion yen; a 7.8% decline in business profit*, to 25.6 billion yen; and a 13.2% increase in sales revenue, to 443.2 billion yen.
* Basically equivalent to operating income under accounting principles generally accepted in Japan and calculated as sales revenue less the sum of cost of sales and selling, general and administrative expenses.
Yokohama Rubber’s sales revenue in the period under review was the highest ever for the company in a six-month period. The sales growth reflected stepped-up marketing of high-value-added tires, improvements in the product mix in the company’s tire sales portfolio, and progress in securing price increases for tires. It also reflected sales gains in every principal product category in Yokohama Rubber’s MB (Multiple Business) segment and the weakening of the yen against other principal currencies.
The business profit decline reflected the adverse effect on profitability in Yokohama Rubber’s Tires segment from increases in raw material costs, in energy costs, and in selling, general and administrative expenses and a sales decline in off-highway tires for agricultural equipment and other applications. Contributing to the increase in profit attributable to owners of parent were gains on sales of idle assets and a gain on the divestiture of a tire wholesaling subsidiary in the United States.
First-half sales revenue in Yokohama Rubber’s Tires segment increased over the same period of the previous year, but business profit declined. Sales revenue in original equipment automobile tires increased, supported by recoveries in new-vehicle sales in Japan and in North America. Those recoveries more than offset the adverse effect of weak sales for Japanese automakers in China.
Sales revenue increased in replacement tires. Business in Japan benefited from early-year snowfalls and resultant vigor in sales of winter tires. In overseas markets, Yokohama Rubber achieved sales growth in high-value-added products, such as ADVAN-brand high-performance tires and GEOLANDAR tires for SUVs and pickup trucks, in Europe and in China.
Yokohama Rubber posted a large increase in sales revenue in off-highway tires for agricultural machinery, industrial machinery, and other applications. Sales declined in the legacy business of YOHT (Yokohama Off-Highway Tires), which the company handled as the ATG (Alliance Tire Group) segment prior to 2022. More than offsetting that decline was the sales contribution from the acquisition, completed in May 2023, of the Swedish company Trelleborg Wheel Systems Holding AB (TWS). That company has operated since the acquisition as Y-TWS.
Sales revenue and business profit increased over the same period of the previous year in Yokohama Rubber’s MB segment. Sales revenue in hose & couplings increased, supported by a recovery in vehicle production in North America. In industrial materials, sales increased as Yokohama Rubber achieved business growth in conveyor belts in Japan and overseas and as the company posted a strong sales performance in marine products. Sales revenue increased in aircraft fixtures and components, reflecting robust demand in the commercial aircraft sector.
Yokohama Rubber abides by the full-year fiscal projections for 2023 that it announced in May 2023. Those projections call for sales revenue of 1.0 trillion yen, business profit of 84.5 billion yen, operating profit of 87.0 billion yen, and profit attributable to owners of parent of 57.0 billion yen. Management has declared an interim dividend of 34 yen per share, an increase of 1 yen over the interim dividend originally scheduled, and plans to recommend a year-end dividend of 34 yen per share. That would bring the full-year dividend to 68 yen per share, an aggregate increase of 2 yen over the previous year.