Hankook Tire Reports Q2 Operating Profit of 187.1 Billion KRW, Up 167% YoY

Global Sales Increase by 20% Due to Rising Demand for New and Replacement Tires

[Asia Economy Reporter Ki-min Lee] Hankook Tire & Technology announced on the 4th that it recorded sales of 1.8063 trillion KRW and operating profit of 187.1 billion KRW in the second quarter of this year. This represents an increase of 32.4% in sales and 167% in operating profit compared to the same period last year.

As a result, Hankook Tire posted sales and operating profit of 3.4232 trillion KRW and 373.2 billion KRW, respectively, in the first half of this year, up 22.2% and 111.9% year-on-year.

Hankook Tire explained that despite regional demand-supply imbalances caused by this year’s shipping and logistics crisis, rising raw material prices, and freight costs, the demand for new car (OE) and replacement (RE) tires in the first half of this year increased compared to last year, driving a roughly 20% increase in global sales volume, which led to this performance.

In the case of RE sales, there was a 5.6% growth compared to the first half of 2019 before the spread of COVID-19, but OE sales slightly decreased compared to 2019 due to delayed production recovery by automakers caused by the semiconductor supply shortage.

In the second quarter as well, sales volume surged by 30% and 50% in the European and North American markets, respectively, compared to last year. Additionally, the proportion of tires 18 inches or larger accounted for 38% of replacement passenger car tire (PCLT) sales, up 5 percentage points from the same period last year, achieving qualitative growth.

Moreover, Hankook Tire supplied OE products for high-performance vehicles and electric vehicles of global automakers such as BMW, Volkswagen, and Audi, and pioneered emerging markets by delivering OE tires to Perodua, Malaysia’s national car brand.

To offset the sharply rising raw material and freight costs and secure profitability, Hankook Tire plans to implement a 3-5% price increase between last month and this month in advanced markets such as Europe and North America. Whether to proceed with additional price increases will be decided considering market demand and cost trends.

Meanwhile, Hankook Tire recently established an ESG (Environmental, Social, and Governance) Committee at its board of directors to strengthen ESG management, strategies, and activities. The inaugural ESG Committee is chaired by outside director Mira Lee.