SEOUL, South Korea — Kumho Tire Co. Inc. is projecting growth of 13% this year over 2023 as it targets high value-added markets, expands its portfolio of premium OE fitments and launches products for premium high-performance and electric vehicles.
Kumho disclosed its 2024 forecast in its fiscal 2023 earnings report, which shows the Seoul-based tire maker raised its pre-tax operating income 52.9% over 2022 on 11.8% higher sales revenue.
Pre-tax operating profits (EBITDA) rose to $499 million on revenue of $3.08 billion, yielding an operating ratio of 16.2%, up four points from last year. Another big key for the company came in December with the opening of a 400,000-sq.-ft. distribution center in Dallas that serves customers in 15 Southern and Midwestern states from fiscal 2022.
Kumho attributed the earnings improvement to stable raw materials prices, reduced logistics/transportation costs and the positive effects of increased production and selling prices.
Revenue benefited from rising selling prices, increased production (especially at its plant in Ben Cat, Vietnam) and an emphasis on higher value-added products in North America and Europe.
Revenue in North America increased 8.9% last year to $966.3 million, according to Kumho's figures, or 31.4% of the company's global sales.
Kumho attributed the increased business in North America to a rising supply of high-margin high-performance products, a strengthening of retail channel sales in underserved regions, the expansion of it logistics network and implementation of co-op promotions.
For fiscal 2024, Kumho is projecting sales revenue of $3.5 billion. Among specifics cited for the current fiscal year, Kumho indicated it expects 42% of its sales will come from larger rim-diameter (18 inches and above) tires with EV tires accounting for 16% of overall sales.
In addition, Kumho has expanded its dealer base in North America and shored up its distribution assets with the opening in December of a 400,000-sq.-ft. distribution center in Dallas.