SEOUL, South Korea—Hankook Tire & Technology Corp. suffered a 6.3-percent drop in pre-tax operating income for the quarter ended June 30 despite a 12.9-percent increase in global sales.
Second-quarter operating profits dropped to $139 million, Hankook said, on sales revenue of $1.62 billion, for an earnings ratio of 8.6 percent.
Hankook cited "external challenges," including global supply-chain disruptions and rising raw-materials costs, for the earnings decline.
"Q2 sales volumes and operating profit … (declined) due to the market impact of the Russia-Ukraine conflict, lockdown in China and historically high inflation rates," Hankook said.
During the quarter, sales of large-diameter passenger car tires "remained a key engine for growth," accounting for 39.1 percent of Hankook's sales of passenger car tires, up 1.1 percentage points over the corresponding 2021 quarter.
The Chinese market was the biggest contributor, with sales of large-diameter tires for passenger cars up 11.5 percent to nearly 52 percent of sales in that market, followed by Korea, up 3.4 percent to 50.5 percent, while Europe reported a 0.5-point increase.
"Further growth in consolidated revenues also came from strong sales on the North American market of both OE and replacement tires," the company added.
For the first half of 2022, Hankook reported a 19.2 percent drop in pre-tax earnings to $239 million on 3.1 percent higher sales of $3.04 billion.
Hankook went on to state its aim of achieving double-digit growth this year and raising the share of revenue generated by larger-diameter tires to 42 percent of total sales of passenger car tires. The company said it will also focus on gaining leadership in the electric vehicle tire segment.
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