Yokohama Rubber First Quarter Profit Plunges 90 Percent
Published On 22-May-2020 20:45:26
The tyre maker said sales fell in both tyre segment and multiple business segments, mainly due to a decline in demand associated with the outbreak of novel coronavirus (COVID-19)
The Yokohama Rubber Co., Ltd., today announced its business and financial results for the first quarter of fiscal 2020. The company saw a sharp decline in profit due to slow demand caused by the Covid-19 Pandemic.
The Japanese tyre manufacturer posted a 258-million-yen loss as compared to 9.1 billion yen in profit in the same period of the previous year. It saw a 90.4% decline in operating profit, to 1.2 billion yen, and a 68.8% decline in business profit, to 1.8 billion yen. Sales revenue declined 13.6%, to 129.1 billion yen.
The tyre maker said sales fell in both tyre segment and multiple business segments, mainly due to a decline in demand associated with the outbreak of novel coronavirus (COVID-19).
In the tyre business, profit fell due to a decline in unit sales volume, an increase in production costs associated with reduced production volume, and inventory-adjustment costs occasioned by a tire recall in North America.
In the original equipment segment, revenue declined in Japan and overseas market because of Covid-19 and suspension of operation at vehicle plants in overseas markets. Sales revenue also saw a decline in replacement tyres.
Several measures are underway at Yokohama to maintain a sound financial position in the face of the COVID-19 challenge. Those measures include fortifying short-term liquidity through optimal fundraising, paring cash expenditures by deferring capital spending and trimming costs, and reducing compensation for directors, officers, associate officers, and managers, said Yokohama.