The Yokohama Rubber Co. has announced today its business and financial results for the first quarter (January to March) of fiscal 2021. Profit attributable to owners of parent climbed 28.1 billion yen over the same period of the previous year, to 27.8 billion yen; on a 35.5 billion yen increase in operating profit, to 36.7 billion yen; an approximately 8-fold increase in business profit, to 14.5 billion yen; and a 15.9% increase in sales revenue, to 149.6 billion yen. All the figures cited here were record high totals for Yokohama.
Yokohama is tackling corporate transformation with an eye to next-generation growth under a medium-term management plan announced in February 2021, Yokohama Transformation 2023 (YX2023). That plan calls for increasing sales revenue to 700 billion yen and business profit to 70 billion yen by 2023. It calls for achieving those targets by exploiting strengths in established operations and by exploring new value for fulfilling needs in an era of profound change. Yokohama is addressing shifting markets in 2021 through the dual approaches of exploitation and exploration to carry out its growth strategy and to reinforce its corporate foundation.
First-quarter sales revenue and business profit in Yokohama’s Tires segment increased over the same period of the previous year, when they declined, and over the same period of 2019. Sales revenue in original equipment tires increased as growth in China more than offset declines in Japan and in North America. The sales growth in China reflected resurgent demand, whereas the declines in Japan and in North America reflected the adverse effect of shortages of semiconductor devices on vehicle production volume.
In replacement tires, sales revenue rose in Japan and overseas. That growth was testimony to vigorous promotion of high-value-added products and expanded production to meet robust demand. Early-year snowfalls in Japan supported strong sales of winter tires there, and the overseas sales growth featured especially strong gains in China, Europe, and Asian nations besides Japan.
In Yokohama’s MB (Multiple Business) segment, sales revenue declined from the same period of the previous year, but business profit increased. Sales revenue in high-pressure hoses rose in Japan and overseas, led by strong sales of hoses for construction equipment. In industrial materials, sales revenue was down slightly as weakness in civil engineering products offset sales growth in marine products. Sales revenue was basically unchanged in Hamatite sealants and adhesives as strength in the automotive sector offset weakness in the construction sector. In aircraft fixtures and components, sales revenue was down on account of sharp declines in demand in the commercial and government sectors.
Sales revenue and business profit in Yokohama’s ATG segment increased to their highest-ever levels. The ATG segment comprises business in off-highway tires for agricultural machinery, industrial machinery, and other applications, and the strong first-quarter performance reflected robust demand in those product sectors.
YX2023 provides for strengthening Yokohama’s business in off-highway tires as a driver of redoubled growth momentum for the company. The ongoing integration of the OHT businesses of Yokohama Rubber and Group companies ATG and Aichi Tire will further accelerate the growth of the Yokohama Rubber Group’s OHT business. The business will be strengthened by a multi-brand approach to market development and responsiveness to customer needs.
Yokohama has revised upward the first-half fiscal projections for 2021 that it announced in February. Its revised first-half projections call for sales revenue of 298 billion yen, up 3.5% over the February projection; business profit of 20 billion yen, up 11.1%; operating profit of 41.5 billion yen, up 5.6%; and profit attributable to owners of parent of 31.5 billion yen, up 10.5%. The company has also revised upward the full-year fiscal projections for 2021 that it announced in February. Its revised full-year projections call for sales revenue of 640 billion yen, up 3.2% over the February projection; business profit of 50 billion yen, unchanged; operating profit of 71.5 billion yen, up 0.3%; and profit attributable to owners of parent of 56 billion yen, up 14.3%.