SEOUL, South Korea — Hankook Tire & Technology Co. Ltd. posted a 41.6% increase in second-quarter operating profit to $188.7 million on 11% higher revenue of $1.72 billion.
Amid a challenging business environment, Hankook linked the increases to "robust sales" of its electric vehicle (EV) tires and high-value products.
Hankook noted that despite reduced demand due to high distributor inventories in major markets, sales of replacement tires exceeded market demand. In addition, as vehicle production increased due to stable supply of automotive semiconductors, the supply of OE tires continued to expand globally.
Stability in raw-material costs and freight rates provided a further boost to profitability, the tire maker noted. The jump in operating earnings raised the operating ratio 2.5 points to 11%.
The proportion of sales attributable to larger rim-diameter tires — those 18 inches and larger — grew by 4.5 percentage points to reach 43.6%.
"Sales of replacement tires and OE tires increased in the major markets, such as Europe, North America, and China, driving global growth," continued Hankook.
For the six-month period ended June 30, Hankook reported a 45.7% jump in operating income to $339 million on 14% higher sales of $3.37 billion; the operating ratio improved two full points to 10%.
Despite a challenging outlook for the second half of 2023, Hankook said it aims to increase sales by over 5% year-on-year. The ambitious target includes raising the proportion of sales attributable to larger-sized consumer tires to 45%.
Hankook said it will also expand its presence in the EV market, towards "reaching 20% of OE tire supply for EV models among total supply of OE tires for passenger cars and light trucks."