Business / Corporate

Toyo Tire falls into red for January-September amid data scandal

Kyodo

Toyo Tire & Rubber Co. fell into the red with a group net loss of ¥4.3 billion for the January-September period of fiscal 2015 as a data falsification scandal involving its products forced it to book a massive special loss.

Toyo reported an operating profit of ¥47.6 billion, up 40 percent from the previous year, benefiting mainly from lower materials costs, on sales of ¥300.9 billion, up 4.8 percent.

On a net basis, the Osaka-based company suffered from a special loss of ¥39.5 billion, including costs to replace its substandard quake-absorbing devices. It also recorded ¥4.2 billion as settlement money for a price cartel in the United States.

For the full year through Dec. 31, Toyo Tire expects a group net profit of ¥5 billion, revised down from the previous forecast in August of ¥12 billion, on sales of ¥410 billion, down from ¥415 billion. Its operating profit is projected to reach ¥59 billion, up from ¥55 billion.

A spate of revelations that the company had falsified data on shock absorbing devices used in hospitals, schools and other buildings across the country have hurt public confidence.

In October, the company said it had falsified data or skipped required tests on some of its vibration-absorbing products used mainly in trains and ships. The potential impact of the new revelation was not reflected in the earnings report.

Toyo Tire is scheduled to hold an extraordinary shareholders’ meeting Thursday to seek approval for a revamped management team in a bid to win back public trust.