SEOUL, South Korea (Nov. 14, 2008) — Hankook Tire Co. Ltd. posted a loss of $10.5 million in the third quarter despite record sales.
The firm, which had profits of $27.5 million in the same quarter last year, had an 18.6-percent rise in sales for the quarter to $1.06 million. Higher costs and fluctuating currencies caused operating profits to slide 45.2 percent, to $39.8 million.
The South Korean company reported a 47.9-percent decline in net profits to $57.8 million on an 18.3-percent rise in sales to $1.4 billion for the nine-month period.
The tire maker credited its ultra-high-performance tire business for boosting sales, noting it was the third consecutive quarter of sales exceeding $1 billion.
Hankook said the tire industry as a whole is still experiencing escalating raw material costs that have jumped about 34.8 percent since a year ago.
The UHP business accounted for $103.4 million of sales, up 40 percent from a year ago. In North America, Hankook increased sales 37 percent while sales in Europe grew 14 percent. Sales jumped 55 percent in the combined markets of Latin America, Asia Pacific, Africa and the Middle East, and 158 percent in Russia and other emerging Eastern European markets.
Hankook attributed its double-digit growth to investing about 5 percent of revenue into research and development and building brand identity through the original equipment market and so-called “smart marketing” that the company said returned multiple benefits.