Hankook posts higher earnings on replacement tire demand, OE growth

Seoul – Hankook has reported higher first-quarter revenue and operating profit, supported by increased replacement tire sales and expanded OE supply to new mobility vehicles.

The South Korean tire maker posted consolidated first quarter revenue of KRW5.31 trillion (€3 billion), up 7% year-on-year, while operating profit rose 43% to KRW507 billion.

In the tire business, revenue increased 9.3% year-on-year to KRW2.57 trillion, while operating profit rose 31% to KRW437.5 billion, resulting in an operating margin of 17.1%, Hankook reported 8 May.

The Korean group said the growth was supported by increased OE tire supply for electric vehicle and hybrid models, alongside stronger replacement tire sales in markets including Europe, South Korea and China.

Hankook added that continued market uncertainties, including tariffs and high oil prices, remained a challenge during the quarter.

High-inch tires of 18 inches and above accounted for 49.1% of passenger car and light truck tire (PC/LT) sales during the quarter, up two percentage points from a year earlier.

Electric vehicle tires represented 29.6% of PC/LT OE tire sales, increasing 6.6 percentage points year-on-year.

In Europe, Hankook said demand for replacement tires were impacted by slower economic recovery due to the Middle East conflict and weakened consumer demand amid inflationary pressure.

OE demand in the region was also impacted by flat new vehicle sales, while EV penetration is increasing driven by surging oil prices and the reinstatement of subsidies.

In North America, replacement consumer demand was weakened due to ‘geopolitical uncertainties and inflation’ while OE demand was soft amid concerns of prolonged Middle East conflict, rising oil prices and tariff impacts.

Hankook said it continues to expand manufacturing capacity through ongoing projects at its Tennessee plant in the US and its Hungary facility in Europe.

The group said it aims to increase the share of high-inch tires to 51% and EV tires to more than 33% of passenger car and light truck OE tire sales.

In the thermal management business, subsidiary Hanon Systems reported first quarter revenue of KRW2.75 trillion, up 5% year-on-year, while operating profit increased 361.1% to KRW97.2 billion.