By Denna Bowman
Yokohama Rubber has raised its financial projections after a surge in demand for winter tyres pushed sales higher than previously anticipated.
The “faster-than-expected recovery” in tyres sales led the company to increase its consolidated net sales and earnings projections for its fiscal year ending 31 March 2010.
Yokohama now projects a net income of 9.4 billion yen (approximately $101.8 million), compared with a net loss of 5.7 billion yen in the previous fiscal year. The projection is 34.3% higher than the projection announced on 30 October 2009.
Operating income is expected to rise 49.9% year-over-year, to 19.2 billion yen ($208 million). That projection is comparatively 12.9% higher.
Yokohama also estimates its net sales will decline 9.1% to 470.0 billion yen ($5.1 billion), an amount 1.1% higher than originally projected.
The company said: “Underlying the improved sales and earnings outlook is the faster-than-expected recovery in tyre sales.
“Demand from automakers in Japan has been stronger than expected, and heavy snowfall has generated stronger-than-anticipated demand for winter tyres in Japan.
“In addition, tyre demand has exceeded forecasts in markets outside Japan, especially in Asian nations. The upturn in sales has raised Yokohama’s capacity utilisation rate, meanwhile, which has fortified profitability further.”