Hankook Tire: Operating profit lower in Q3 2019

Larger tyre sizes accounted for a higher percentage of sales both in Europe & worldwide

Hankook Tire has reported consolidated global sales of KRW 1,833.2 trillion (£1.2 billion) for Q3 2019, a 4.4 per cent increase compared with the third quarter of last year. EBITDA declined 3.2 per cent to KRW 333 billion (£223.0 million), with the margin decreasing 1.4 percentage points to 18.2 per cent. Operating profit amounted to KRW 180 billion (£125.5 million), four per cent lower year-on-year.

Sales in the 17-inch and above size category accounted for 55 per cent of Hankook’s total passenger car and light truck tyre sales, three per cent more than in the same period of 2018. Sales growth in 18-inch and higher sizes exceeded ten per cent.

The tyre maker anticipates full-year sales of approximately KRW 7 trillion (£4.7 billion) and an operating profit margin of around eight per cent.

Europe – Strength in OE, weakness in replacement market

Turnover within Hankook Tire’s European business was KRW 626 billion (£419.2 million) during Q3 2019, virtually unchanged from the same period of 2018. 45.8 per cent of passenger car and light truck tyre sales were made in the 17-inch and above size category, up from 40.5 per cent a year earlier.

Hankook comments that its replacement market car and light truck tyre sales were “in line with weak market conditions” and volumes were thus slightly lower year-on-year. Increased business with premium car brands gave Hankook “favourable OE sales” despite weak overall vehicle production figures.

More information about Hankook Tire’s Q3 2019 financial results can be read here.

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