SEOUL, South Korea—Hankook Tire Co. Ltd. suffered a 19.9 percent decrease in operating income for the quarter ended June 30 on 2.5 percent lower sales.
Hankook cited dropping prices and fluctuations in exchange rates as the main factors contributing to the sales and earnings declines. Hankook said the price erosions are being caused by intensifying competition in the global tire market and slow market growth in China and South Korea.
Operating income fell to $183.2 million on sales of $1.48 billion, yielding an operating ratio of 12.4 percent vs. 15.1 percent a year ago.
Despite the overall sale decline, Hankook said its sales volumes for Europe and North America grew 12 to 14 percent and that it expects this “robust growth” to continue for some time.
The South Korean tire maker also reported a 3.5 percent increase in sales of ultra-high-performance tires, with UHP sales accounting for roughly one-third of the company's revenue in the passenger car segment during the second quarter.
Operating income for the first half of fiscal 2015 was off 20.9 percent from a year ago to $368.2 million on $2.83 billion in sales, a 7 percent drop.