Kumho returns to profit in Q1

ERJ staff report (DS)

Seoul - Kumho Tire's parent company - not global consolidated figures -- posted first quarter sales of KRW 586.4 billion (euro 401 million) - a growth of 27.7 percent quarter-on-quarter and 18 percent year-on-year. This resulted in an operating profit of KRW 21.3 billion and a net income of KRW 20.9 billion.

Export volume for the period was up 40 percent year-on-year, thanks in particular to the general recovery of both the car and tyre markets in North America - one of the company's key sales territories. Furthermore, exports of UHP tyres to the world's largest tyre market were up no less than 150 percent.

The results are even more promising when one takes into account the fact that production could not meet demand due to prolonged collective bargaining and wage negotiations with the union. This, in turn, delayed the injection of much needed emergency funding.

"The positive effect of restructuring will become still more apparent in the second quarter as the company accelerates the recovery process required to complete the work-out programme it is currently undergoing," he added

The company's Q2 forecast is based on the improved cost competitiveness expected to ensue from its recent agreement with the union that called for both wage cuts and increased productivity, plus a full order book resulting from increased demand for its tyres over the peak summer season.

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Press release from Kumho