SEOUL, South Korea (Aug. 13, 2010) — Kumho Tire Co. Inc. was solidly in the black in the second quarter as sales jumped 34 percent over the 2009 period.
Kumho cited normalized operation of domestic and foreign plants, increased sales volumes both domestically and internationally and cost cutting led by the recent pact with its union for its recovery. The firm posted nearly $100 million in net losses in the first two quarters of 2009.
Kumho said its export sales growth was led by demand from North America, where the firm posted growth of 40 and 51 percent, respectively for its ultra-high-performance tires and general tires.
For the quarter ended June 30, Kumho reported $57.8 million in operting income and $46.5 million in net income on sales of $542.4 million.
For the half year, Kumho's operating income stood at $76.2 million and net income at $64.4 million. Sales were up 25.8 percent to $1.05 billion.
Kumho pointed to its earnings improvement — operating margin in the quarter of 10.7 percent — as a sign its efforts for business normalization are working. Kumho has been operating under a “joint administration” work-out plan with its creditor financial institutions since January after the firm's parent company, Kumho Asiana Group, was hit by a cash shortage brought on by a 2006 acquisition.
“Kumho Tire's financial structure has been rapidly improving as its business normalization plan has been implemented as planned,” said Joo Wan Hong, director of investor relations. “As a result, the company's overall competitiveness in sales and manufacturing sector is recovering faster than expected.”
As a result of the company's actions, Kumho reduced its debt by 40 percent from a year ago.
As a result of the improvements, Kumho is forecasting gains in sales and profits for the rest of the year.