Nexen earnings up double-digits on modest sales growth

SEOUL, South Korea—Nexen Tire Corp. reported double-digit earnings growth for the quarter and half year ended June 30 on single-digit sales growth.

For the quarter, Nexen generated $66.3 million in pre-tax operating income (EBITDA) on 8.1-percent higher sales of $526 million.

In the half year, Nexen generated $117.2 million in pre-tax operating income, a four-fold increase over the first half of 2022, on 2.9-percent higher sale of $1.03 billion.

Nexen attributed the earnings improvement to price increases and an advantageous product mix—including above-market growth in larger diameter tires—during the periods under review. Larger-diameter tires now account for roughly 35 percent of Nexen's revenue, the company stated.

Leading the way in sales/revenue growth was Nexen's European operations, which posted 31-percent higher sales of $210 million, thanks in part to a strong sales infrastructure throughout Europe and increasing output at the firm's plant in Zatec, Czech Republic, where annual capacity at the 4-year-old factory is being doubled to 12 million tires by year-end 2024.

Europe represents nearly 40 percent of Nexen's global revenue.

Sales in North America, by contrast, fell 15 percent during the quarter to $129.8 million, but were up 1.3 percent for the half year to $257.4 million.

Nexen at this time did not provide an update on progress toward selecting a site for a U.S. plant. Earlier, Brian Yoonseok Han, CEO of Nexen Tire America Inc., said Nexen is targeting eight states in the Southeast as the site for the plant.

In the quarterly earnings report, Nexen also referenced the addition of a fourth U.S. warehouse, in Texas.