Rising costs take toll on Hankook's first quarter earnings

Seoul – Hankook & Co. has reported a decline in first quarter operating profit despite a sharp increase in group-wide sales for the first three months of 2025.

The group posted consolidated sales of KRW 4.9 trillion (€3.2 billion), up 133.4% compared to the same period last year, reflecting the first-time inclusion of Hanon Systems in its financial results.

Group operating profit, however, fell 11.1% from KRW 398.7 billion to KRW354.6 billion, Hankook reported 9 May.

The tire segment posted sales of KRW 2.3 trillion, up 10.3% year-on-year from KRW 2.1272 trillion, while operating profit for the segment declined 16.3% to KRW 333.6 billion.

Newly consolidated thermal management specialist Hanon Systems contributed KRW 2.6173 trillion in sales and KRW 20.9 billion in operating profit, down 68.5% compared to the first quarter of 2024.

“Despite ongoing R&D investment in future mobility amid global economic uncertainties, rising costs – particularly the rise in raw material costs and ocean freight rates – resulted in a negative impact on profitability,” Hankook explained.

EV-dedicated tires made up 23% of OE sales for passenger cars and light trucks, up 6 percentage points from a year earlier.

Hankook highlighted continued momentum in high-inch tire sales, with 18-inch and larger passenger car tires making up 47.1% of total passenger and light truck tire sales.

Regional share for large tires was highest in China (64.7%), followed by Korea (58.5%), North America (57.1%), and Europe (39.1%).

The company also expanded its OE tire portfolio, adding the Ventus evo SUV to the third-generation Volkswagen Tiguan.

Hankook said it now supplies tires to 50 global premium car brands across more than 280 vehicle models.