Hankook earnings dip on slightly higher sales

Seoul – Despite slightly higher sales, Hankook Tire Co. Ltd posted drops of 3.3% and 7.6% in earnings (EBITDA) in the first quarter and first half to $306 million and $605.2 million, respectively.

The Korean tire maker did not comment on the reasons for the earnings declines over the first six months to 30 June.

Operating profit was off as well, down 10.4% and 15.7% for the quarter and half.

Sales for the quarter rose 2.3% to $1.58 billion and were up 0.3% for the half to $3.07 billion, dropping the operating ratio two full points to 11.1% for the half.

Hankook said lower replacement market sales in Korea, the Middle East and Southeast Asia offset volume growth in other major markets.

OE sales were stable, except for in South Korea, where some vehicle makers cut production, the company’s statement added.

Hankook registered a 1.5% gain in sales in North America to $436.6 million in the quarter, while sales for the first half were unchanged at $850 million.

The company attributed replacement market sales growth in North America to increased demand for winter tires and "heightened" freight demand.

Based on the first-half performance, Hankook lowered its guidance for fiscal 2018 to around $6.5 billion in sales with an operating ratio of 11-12%.