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MarketScreener Homepage  >  Equities  >  Tokyo Stock Exchange  >  Toyo Tire Corporation    5105   JP3610600003

TOYO TIRE CORPORATION

(5105)
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Toyo Tire : Summary Report of Consolidated Business Performance for the Second Quarter of Fiscal Year 2020

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08/06/2020 | 11:34pm EDT

Summary Report of Consolidated Business Performance

for the Second Quarter of Fiscal Year 2020 (January 1, 2020 - December 31, 2020)

HYOGO, JAPAN - August 7, 2020 - Toyo Tire Corporation ("the Company"; President & CEO: Takashi Shimizu) announces its Consolidated Business Performance for the Second Quarter of Fiscal Year 2020 (January 1, 2020 through December 31, 2020) as follows:

Quantitative information about the quarterly financial results

(1) Business Results

●Net Sales:

150,586 million yen (a decrease of 27,971 million yen or

15.7% from the same period of FY2019)

●Operating Income:

7,928 million yen (a decrease of 7,415 million yen or

48.3% from the same period of FY2019)

●Ordinary Income:

4,379 million yen (a decrease of 9,473 million yen or

68.4% from the same period for FY2019)

●Profit Attributable

520 million yen (a decrease of 7,001 million yen or 93.1%

to Owners of Parent:

from the same period for FY2019)

(2) Results by Business Unit

The Tire Business unit posted net sales of 134,430 million yen (a decrease of 21,203 million yen or 13.6% from the same period of FY2019) and an operating income of 9,733 million yen (a decrease of 6,381 million yen or 39.6% from the same period of FY2019).

The Automotive Parts Business unit posted net sales of 16,129 million yen (a decrease of 6,758 million yen or 29.5% from the same period of FY2019) and an operating loss of 1,805 million yen (a decrease of 1,049 million yen from the same period of FY2019).

  1. Status of provision of reserves for product warranties and allowance for product repairs pertaining to the company's seismic isolation rubber issue

In the fiscal year ended December 2015, some products shipped by the company did not conform to performance evaluation criteria certified by Japan's Ministry of Land, Infrastructure, Transport and Tourism. When applying for Ministry certification for seismic isolation rubber for construction, in some cases the certification was based on applications lacking technical grounds.

For the second quarter of FY2020, the company posted an extraordinary loss of 1,751 million yen (product compensation response measure expenses of 1,438 million yen and a provision of reserves for product compensation of 313 million yen). This was because it became possible to make calculations as the situation progressed, and the company recorded 64 million yen in compensation, etc., and 630 million yen in miscellaneous charges (primarily, in payroll for the seismic isolation rubber task force, etc.).

Depending on the progress of how this is handled in the following quarter and beyond, if

future costs arise (mainly business compensation and repairs for damage such as delayed damages, expenses, etc., when repair work expenses are found to additionally exceed the reserve provisions), additional provision of reserves for product warranties may be posted, but at the present time it is difficult to reasonably estimate the amount.

(4) Explanation of financial situation

Total assets at the end of the second quarter of the consolidated accounting period were 434,128 million yen, a decrease of 34,618 million yen compared to the end of the previous consolidated accounting period.

Liabilities were 221,936 million yen, a decrease of 22,301 million yen compared to the previous consolidated year-end accounting period.

Interest-bearing liabilities were 123,898 million yen, an increase of 5,353 million yen compared to the previous consolidated year-end accounting period.

Net assets as of the end of the second quarter of the consolidated accounting period were 212,192 million yen, a decrease of 12,317 million yen compared to the end of the previous consolidated accounting period.

As a result, the capital ratio increased 1.0 points, compared to the previous consolidated year-end accounting period, to 48.5 %.

Consolidated Balance Sheets

(Unit: Millions of yen)

End of previous fiscal year

End of current fiscal year

December 31, 2019

June 30, 2020

Assets

Current Assets

Cash and deposits

25,120

28,057

Notes and accounts receivable - trade

75,445

59,053

Merchandise and finished goods

58,042

50,977

Work in process

3,572

3,444

Raw materials and supplies

14,954

14,557

Other

20,580

16,522

Allowance for doubtful accounts

(444)

(354)

Total current assets

197,271

172,259

Fixed Assets

Property, plant and equipment

Buildings and structures, net

64,554

63,129

Machinery, equipment and vehicles, net

96,667

95,771

Other, net

45,856

43,348

Total property, plant and equipment

207,079

202,248

Intangible Assets

Goodwill

1,122

980

Other

5,628

5,526

Total intangible assets

6,750

6,507

Investments and other assets

Investment securities

44,404

36,263

Other

13,344

16,953

Allowance for doubtful accounts

(104)

(104)

Total investments and other assets

57,644

53,112

Total fixed assets

271,475

261,869

Total assets

468,746

434,128

Consolidated Balance Sheets

(Unit: Millions of yen)

End of previous fiscal year

End of current fiscal year

December 31, 2019

June 30, 2020

Liabilities

Current liabilities

Notes and accounts payable - trade

34,137

19,129

Short-term loans payable

39,612

35,591

Accounts payable - other

20,169

16,678

Income taxes payable

1,550

1,145

Provision for product compensation

7,947

6,209

Other

26,579

24,317

Total current liabilities

129,998

103,073

Non-current liabilities

Long-term loans payable

75,902

85,527

Net defined benefit liability

5,840

6,099

Provision for product compensation

16,563

12,225

Other provision

107

99

Other

15,825

14,911

Total non-current liabilities

114,239

118,863

Total liabilities

244,237

221,936

Net assets

Shareholders' equity

Common stock

55,935

55,935

Capital surplus

54,499

54,504

Retained earnings

86,110

82,782

Treasury stock

(154)

(144)

Total shareholders' equity

196,391

193,077

Accumulated other comprehensive income

Valuation difference on available-for-sale securities

21,222

16,480

Deferred gains or losses on hedges

(9)

2

Foreign currency translation adjustments

2,600

(1,312)

Remeasurements of defined benefit plans

2,556

2,443

Total accumulated other comprehensive income

26,370

17,614

Non-controlling interests

1,747

1,500

Total net assets

224,509

212,192

Total liabilities and net assets

468,746

434,128

Consolidated Statements of Income

(Unit: Millions of yen)

Previous fiscal year

Current fiscal year

FY2019

FY2020

(From January 1, 2019

(From January 1, 2020

to June 30, 2019)

to June 30, 2020)

Net sales

178,558

150,586

Cost of sales

118,618

100,789

Gross profit

59,939

49,797

Selling, general and administrative expenses

44,595

41,868

Operating income

15,344

7,928

Non-operating income

Interest income

242

178

Dividends income

867

790

Equity in earnings of affiliates

72

78

Other

1,209

923

Total non-operating income

2,391

1,970

Non-operating expenses

Interest expenses

1,118

985

Foreign exchange losses

980

2,921

Stock issuance cost

460

Other

1,323

1,613

Total non-operating expenses

3,883

5,520

Ordinary income

13,852

4,379

Extraordinary income

Gain on sales of investment securities

321

1,265

Total extraordinary income

321

1,265

Extraordinary loss

Loss on retirement of non-current assets

485

192

Impairment loss

404

187

Loss on product compensation

2,135

1,438

Loss on provision for product compensation

195

313

Loss on COVID-19

1,604

Total extraordinary loss

3,221

3,736

Profit before income taxes

10,952

1,908

Income taxes

3,055

1,536

Profit

7,897

371

Profit (Loss) attributable to non-controlling interests

376

(148)

Profit attributable to owners of parent

7,521

520

Consolidated Statements of comprehensive income

(Unit: Millions of yen)

Previous fiscal year

Current fiscal year

FY2019

FY2020

(From January 1, 2019

(From January 1, 2020

to June 30, 2019)

to June 30, 2020)

Profit

7,897

371

Other comprehensive income

Valuation difference on available-for-sale securities

54

(4,741)

Deferred gains or losses on hedges

(7)

12

Foreign currency translation adjustment

(3,455)

(3,941)

Remeasurements of defined benefit plans, net of tax

62

(113)

Share of other comprehensive income of associates accounted for using equity method

(23)

(36)

Total other comprehensive income

(3,369)

(8,820)

Comprehensive income

4,527

(8,448)

(Comprehensive income attributable to)

Owners of the parent

4,188

(8,235)

Comprehensive income attributable to non-controlling interests

339

(213)

Consolidated Statements of Cash Flows

(Unit: Millions of yen)

Previous fiscal year

Current fiscal year

FY2019

FY2020

(From January 1, 2019

(From January 1, 2020

to June 30, 2019)

to June 30, 2020)

Cash flows from operating activities

Income before income taxes and minority interests

10,952

1,908

Depreciation and amortization

12,761

10,528

Settlement received

(284)

Increase (decrease) in net defined benefit liability

82

154

Interest and dividends income

(1,110)

(968)

Interest expenses

1,118

985

Foreign exchange losses (gains)

434

960

Stock issuance cost

460

Equity in (earnings) losses of affiliates

(72)

(78)

Loss (gain) on sales of investment securities

(321)

(1,265)

Loss on retirement of noncurrent assets

485

192

Impairment loss

404

187

Loss on product compensation

2,135

1,438

Loss on provision for product compensation

195

313

Decrease (increase) in notes and accounts receivable-trade

10,735

15,149

Decrease (increase) in inventories

(4,259)

6,031

Increase (decrease) in notes and accounts payable-trade

(15,580)

(13,915)

Other, net

(3,391)

(1,807)

Sub-total

14,747

19,814

Interest and dividends income received

1,253

937

Interest expenses paid

(1,266)

(1,116)

Settlement package received

85

Payments of product compensation

(14,414)

(7,500)

Income taxes paid

(4,287)

(1,359)

Income taxes refund

911

585

Net cash provided by (used in) operating activities

(2,971)

11,362

Cash flows from investing activities

Additions to property, plant and equipment

(19,457)

(11,560)

Proceeds from sales of property, plant and equipment

90

158

Additions to intangible assets

(392)

(620)

Additions to investments in securities

(257)

(7)

Proceeds from sales and redemption of investment securities

413

2,796

Other, net

266

(981)

Net cash provided by (used in) investing activities

(19,337)

(10,214)

Cash flows from financing activities

Net increase (decrease) in short-term bank loans

(5,794)

(1,770)

Increase (decrease) in commercial papers

(14,000)

Proceeds from long-term debt

8,322

16,674

Payments of long-term debt

(9,115)

(8,255)

Cash dividends paid

(3,170)

(3,844)

Dividends paid to non-controlling interests

(312)

(34)

Proceeds from issuance of shares

50,441

Other, net

(505)

(119)

Net cash provided by (used in) financing activities

25,864

2,650

Effect of exchange rate change on cash and cash equivalents

(272)

177

Net Increase (decrease) in cash and cash equivalents

3,283

3,975

Cash and cash equivalents at beginning of the year

30,467

24,079

Cash and cash equivalents at end of the period

33,750

28,055

Disclaimer

Toyo Tire & Rubber Co. Ltd. published this content on 07 August 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 07 August 2020 02:33:11 UTC


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Financials
Sales 2020 340 B 3 242 M 3 242 M
Net income 2020 17 844 M 170 M 170 M
Net Debt 2020 90 766 M 866 M 866 M
P/E ratio 2020 14,5x
Yield 2020 2,63%
Capitalization 264 B 2 516 M 2 517 M
EV / Sales 2020 1,04x
EV / Sales 2021 0,95x
Nbr of Employees 11 840
Free-Float 71,3%
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Income Statement Evolution
Consensus
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Mean consensus OUTPERFORM
Number of Analysts 7
Average target price 2 016,67 JPY
Last Close Price 1 714,00 JPY
Spread / Highest target 48,8%
Spread / Average Target 17,7%
Spread / Lowest Target -6,65%
EPS Revisions
Managers
NameTitle
Takashi Shimizu President & Representative Director
Yasuhiro Yamada Chairman
Ken Morita Independent Outside Director
Atsushi Takeda Independent Outside Director
Masayuki Kanai Director & Managing Executive Officer
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