The Yokohama Rubber Company (5101) Q2 2024 earnings summary

Executive summary

• Achieved record 1H FY2024 sales revenue of ¥525.3bn, up 18.5% year-over-year and 5.1% above initial plan.

• Business profit surged 113.4% year-over-year to ¥54.6bn, with margin improving to 10.4%.

• Net profit rose 68.3% year-over-year to ¥46.6bn, exceeding initial plan by 82.7%.

• Tire segment accounted for 89.4% of total sales, driven by OEM recovery, forex impact, and strong replacement/OHT sales.

• Operating environment improved in Japan and Europe, US consumer demand strong, China remained weak.

Financial highlights

• Operating profit for 1H FY2024 reached ¥56.3bn, up 99.6% year-over-year.

• Gross profit increased to ¥181.9bn from ¥134.0bn year-over-year; gross margin improved.

• Basic EPS rose to ¥290.49 from ¥172.62.

• Total comprehensive income surged 63.2% to ¥171.4bn.

• Net cash provided by operating activities was ¥21.8bn; cash and cash equivalents at period end were ¥117.0bn.

Outlook and guidance

• FY2024 full-year sales revenue target revised upward to ¥1,105bn from ¥1,060bn.

• Business profit target raised to ¥128.5bn for FY2024.

• Dividend forecast raised to ¥98 per share (interim ¥46, year-end ¥52), up ¥14 year-over-year.

• FY2026 targets revised: sales revenue ¥1,250bn, business profit ¥150bn, margin 12%, ROE above 10%.