SEOUL, South Korea—Nexen Tire Corp. posted a 52.2-percent increase in first quarter pre-tax operating earnings (EBITDA) to $48.5 million on 6-percent higher sales of $481.6 million.
Seoul-based Nexen, the world's No. 18 tire maker, linked the earnings improvement to "minimizing off-season impact," despite increases in the cost of raw materials and freight. Revenue growth was achieved through "stable sales volume" with average selling prices showing "settled earning capability," Nexen said.
The improvement in EBITDA raised the operating ratio four-plus points to 14.5 percent. Net earnings more than tripled to $29.4 million.
In terms of regional performance, the European Union contributed most to sales, with 36 percent of overall revenue coming from the bloc, ahead of North America, which accounts for 26 percent of global sales.
First quarter sales in the EU grew 8.5 percent to $172 million, the tire maker reported, based in large part on growing replacement market demand for larger rim-diameter and all-weather tires. Original equipment-related revenue was stable, Nexen said, through portfolio optimization and despite disruptions in the automotive supply-chain due to the Red Sea crisis.
Nexen said it expects its sales in the region to grow gradually as it ramps up production at its 5-year-old factory in Zatec, Czech Republic, where the full impact of a recent expansion—designed to double annual capacity to 11 million units—is expected to come on stream in early 2025.
