SEOUL, South Korea — Despite strike-related supply issues in the fourth quarter, Hankook Tire & Technology Co. Ltd. reported improved fiscal 2021 sales and earnings and is forecasting double-digit growth in fiscal 2022.
For the fiscal year ended Dec. 31, Hankook reported a slight improvement (2.1%) in pre-tax operating income to $560.4 million on 10.7% higher sales of $6.24 billion. As a result, the operating ratio fell to 9% from 9.7%.
The company's relatively modest gain in fiscal year earnings can be tied to the fourth quarter, which Hankook described as a "particular bump in the road." Operating income in the quarter fell 61.3% from the 2020 period to $76 million, a decline Hankook attributed largely to a rise in operating costs and delayed sales opportunities caused by labor strikes at the firm's Daejeon and Geumsan, South Korea, plants.
Sales during the period rose 7% to $1.65 billion.
An important sales driver for Hankook was larger rim-diameter tires (18 inches and larger), which accounted for 37.7% of the firm's car tire revenue, up from 34.6% in 20202.
Hankook noted that economic momentum slowed in the second half of the year with issues such as global supply-chain disruption, semiconductor shortage and rising raw-materials costs impacting business. In response, Hankook booked continued increases in replacement tire sales, effective regional pricing strategy and strong sales of larger-diameter tires.
At the same time, Hankook strengthened its original equipment (OE) business relationships, with new OE contracts with Porsche A.G. (Panamera), BMW A.G. (X3M and X4M) and Volkswagen Group (Audi e-tron GT and Volkswagen ID.4.)
As for 2022, Hankook said it expects to achieve double-digit growth, based in part on increasing the share of larger-diameter tires sales to 42% of passenger tire sales.
Business in North America increased 13.6% to $1.64 billion, and thus represents 20% of global revenue.
