SEOUL, South Korea — Kumho Tire Co. Inc. suffered an 81.2-percent drop in pre-tax operating profit for fiscal 2017, on 2-percent lower sales.
Kumho's earnings before interest, tax, depreciation and amortization (EBITDA) fell to $57.4 million on sales of $2.55 billion, according to the company's fourth quarter investor relations documents.
As a result, the operating ratio fell more than nine points to 2.3 percent. The operating result turned red to the tune of $139 million. Kumho did not report net earnings.
Kumho cited unfavorable foreign exchange rates, a slowdown in OE volume in the U.S. and Europe and higher raw materials costs for the fall in earnings.
Sales in Kumho's home market fell 0.9 percent to $926 million, primarily due to lower OE sales. Replacement sales were up due to "robust" growth of winter products. Business in China dropped 11.4 percent to $302 million on "lackluster" replacement demand.
Sales in North America rose 1.1 percent to $574.2 million on increased replacement demand from national dealers. OE sales were weak due to models equipped with Kumho tires being discontinued.
Business in Europe was unchanged at $353 million as lower OE sales offset replacement market sales gains.