SEOUL, South Korea—Hankook Tire Co. Ltd. suffered an 11.3 percent drop in operating income for fiscal 2018 on slightly lower sales.
Hankook cited a slowdown in demand from global auto markets such as China as one reason for the earnings decline, to $582 million. Sales were down just 0.2 percent, to $5.62 billion, lowering the operating margin three points to 8.8 percent.
Business in North America essentially was unchanged from 2017, with revenue down 0.6 percent to $1.74 billion, Hankook said, noting that replacement market sales were down "due to the impact of the change in the U.S. wholesale business environment," while OE sales were up.
Europe remained Hankook's single largest market at $2.1 billion, up 5.1 percent over 2017 on stronger business in eastern Europe. Sales in South Korea and China fell 7.1 and 7.4 percent, respectively.
Hankook noted that sales of higher rim diameter tires—those 18 inches and larger—rose 3.9 percent last year and now account for 52.3 percent of the firm's passenger tire business.
Hankook is forecasting growth of 6.6 and 7.4 percent, respectively, for operating profits and sales in fiscal 2019 as it continues to build business with the higher rim-diameter tires and diversify its OE supply portfolio.