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Yokohama Rubber said net income in the first quarter of the present fiscal period increased 74.3% year on year to JPY2.8bn.

Sales increased 10.2% to JPY129.4bn mainly from strong sales of tyres in Japan and overseas. Operating income declined 29.9%, to JPY 4.1bn. Unit sales growth and progress in reducing costs were sufficient to offset the adverse effect on earnings of the appreciation of the yen and increased selling expenses, but price increases for Yokohama products were insufficient to fully offset the effect of rising prices for raw materials.

The yen appreciated less sharply, however, than in the same period of the previous fiscal year, and currency translation losses therefore narrowed greatly. Income before income taxes and minority interests increased 28.5% to JPY4bn.

Sales in Yokohama’s tyre operations increased 12.1% to JPY103.8bn, and operating income declined 30.1%, to JPY 3.7bn. Japanese demand for original equipment tyres declined in the wake of the Great East Japan Earthquake, but Yokohama posted strong sales gains in the Japanese replacement market and also registered growth in North America, Europe, and China. The decline in operating income reflected the rising prices for raw materials.

Yokohama projected that net sales in the six months to 30 September 2011, will increase 8.3% over the same period of the previous fiscal year, to JPY258bn, that operating income will decline 27.5% to JPY 6bn; and that net income will increase 7.3%, to JPY 1.3bn.

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By GlobalData