Rising UHP sales drives Hankook operating profit higher
Although its first quarter sales are down 1.7 per cent year-on-year and 1.3 per cent lower than in the final quarter of 2012, Hankook Tire describes its consolidated sales for January to March 2013 as “well-sustained”, and the company’s bottom line faired well. The company earned global revenues of KRW 1.68 trillion (£975 million) in the first quarter, while operating profit amounted to KRW 254.4 billion (£147.8 million), a 10.4 per cent year-on-year improvement and 14.4 per cent higher than in Q4 2012. The operating profit to sales ratio reached 15.2 per cent.
Hankook Tire attributes much of this enhanced profitability to its “growingly recognised brand value as a premium tyre manufacturer”. In turn, premium brand equity is considered a main protagonist behind the “sales surge” in UHP tyres Hankook enjoyed. European sales of UHP tyres rose 64 per cent during the quarter, driving accumulated sales revenue up by 25 per cent compared to the previous quarter. Russia and the CIS were also market leaders in terms of growing UHP tyre sales, with approximate respective growth of 80 per cent and 77 per cent. Hankook Tire’s Asia-Pacific region also enjoyed a 40 per cent sales increase in the premium tyre segment. In addition, the revenue from Original Equipment (OE) supply with UHP tyres also increased by 16 per cent.
“Enabled by our foresighted mindset into the future and smart investments into the global tyre market, Hankook Tire was able to secure a steady and robust financial performance for the first quarter despite a slow tyre market,” stated Hankook Tire vice-chairman and CEO Seung Hwa Suh. “Based on our cutting-edge technological prowess as well as continuous enhancements in brand value, Hankook Tire will accelerate to take on our path to become a global top-five tyre company in the near future.”