Tokyo—The Yokohama Rubber Co., Ltd., announced today its business and financial results for fiscal 2021 (January to December 2021). Sales revenue increased 21.7% over the previous year, to 670.8 billion yen; business profit increased 73.3%, to 62.2 billion yen; operating profit increased 132.4%, to 83.6 billion yen; and profit attributable to owners of parent increased 148.9%, to 65.5 billion yen. All of those figures were record-high for full-year performance at Yokohama.
* Business profit is equivalent to operating income under accounting principles generally accepted in Japan and consists of sales revenue less the sum of cost of sales and selling, general and administrative expenses
* Yokohama has divested its Hamatite sealants and adhesives business. The company has therefore reclassified its Hamatite business, formerly included in the MB (Multiple Business) segment, as discontinued operations for the fiscal years ended December 31, 2021 and 2020. This change has included excluding the Hamatite fiscal results from the figures presented here for sales revenue, business profit, and operating profit, but Yokohama continues to include those results in the figures presented for profit attributable to owners of parent.
The upturns in sales revenue and earnings reflected Yokohama’s success in implementing price increases for tires in North America and other overseas markets and the weakening of the yen against other principal currencies. Those factors more than compensated for the adverse effects of upturns in raw material costs and logistics expenses, of the disruptions in global supply chains, and of the challenges presented by the Covid-19 pandemic.
Both sales revenue and business profit increased over the previous year in Yokohama’s Tires segment. The company’s sales of original equipment tires increased as the adverse effects of the Covid-19 pandemic abated somewhat. That increase occurred despite the continuing adverse effect of the global shortages of semiconductor devices vehicle productions. Yokohama also posted sales growth in replacement tires. It promoted sales of high-value-added products worldwide, as with the Japanese launch of the iceGUARD 7 studless snow tire. The company achieved sales gains in North America, in Europe, and in Asian markets outside Japan, led by Indian business.
Sales revenue and business profit also increased over the previous year in Yokohama’s MB segment. Business in high-pressure hoses expanded, led by strong sales of hydraulic hoses in the resurgent construction equipment sector. Sales were basically flat in industrial materials, as delays in large projects undermined replacement business in marine products and offset Japanese sales growth in conveyor belts. In aircraft fixtures and components, sales declined on account of weak demand in the commercial sector.
Yokohama’s ATG (Alliance Tire Group) segment, too, generated growth in sales revenue and business profit, both of which reached their highest level ever. That segment comprises business in tires for agricultural machinery, industrial machinery, and other off-highway applications, and sales increased over the previous year in all of the ATG segment’s principal product categories.
Management projects that full-year sales revenue in 2022 will increase 11.8% over the previous year, to 750.0 billion yen, and thus reach another all-time high. The continuing upward movement in energy and raw material costs and in logistics expenses are taking a toll, however, on earnings, and management projects that business profit will decline 3.5% from the previous year, to 60.0 billion yen; that operating profit will decline 30.1%, to 58.5 billion yen; and that profit attributable to owners of parent will decline 38.9%, to 40.0 billion yen. Management will recommend paying a year-end dividend of 33 yen and will declare an interim dividend of 33 yen, which would result in an annual dividend 66 yen.
Yokohama has absorbed the ATG segment into its Tires segment as of 2022. That is on account of similarities between the two segments in regard to customers and product characteristics. The company will thus report results in reference to three segments: Tires, MB, and Other.