SEOUL, South Korea (Oct. 22, 2009)—Hankook Tire Co. Ltd. reported a sixfold increase in operating income in the quarter ended June 30 as sales jumped 26.4 percent to $1.23 billion, largely on the expanding contribution of the firm's operation in Hungary.
The increase in third quarter earnings, to $236.3 million or 19.1 percent of sales, is attributed to the jump in sales—especially of high-performance tires—containing operating costs and a drop in sales-related expenses. The Hungarian operations contributed roughly $25 million of the expanded quarterly sales.
Lower raw materials costs played a role in the improved earnings, Hankook said.
Hankook President and CEO Seung Hwa Suh pointed to his company's “continuous efforts to enhance the quality of its products and services” as fundamental to the firm's growth.
Suh said Hankook will continue to invest in its manufacturing and development resources to support its growth prospects. In particular, Hankook recently committed to invest $333.5 million over two years to double annual capacity at its consumer tire plant in Dunaujvaros, Hungary, to 10 million tires.
The tire maker said it registered sales growth in all of its major regional markets, including 26.7-percent growth in North America to $137 million. This also is 10.5 percent higher than in the second quarter, putting Hankook on target to post sales in North America of more than $500 million.
For the nine months ended June 30, Hankook's consolidated global sales were up 70.6 percent to $3.3 billion. Operating income was up 128.1 percent to nearly $390 million, or 11.8 percent of sales.