Nexen reports Q2 double-digit sales, earnings growth

SEOUL, South Korea—Nexen Tire Corp. achieved record quarterly revenue and significant pre-tax operating earnings (EBITDA) growth in the three months ended June 30, helped by a strong performance in Europe.

Despite "unfavorable markets," Nexen's second-quarter EBITDA earnings rose 38.2 percent to $87.8 million on 10.5 percent higher sales of $550.8 million, raising the earnings ratio three points over the year-ago period to 15.8 percent.

The gains were linked to higher sales volume and improved product mix, Nexen said. Revenue grew across all regions compared with the same period a year ago, particularly in Europe, where volumes increased ahead of the peak winter tire season, pushing revenue up to $224.2 million.

Business in North America increased 8.1 percent to $139.7 million, buoyed by rising sales of larger-rim-diameter tires to OE customers and recovering replacement market sales that were impacted earlier by container shortages.

Furthermore, Nexen noted that its OE business with vehicle makers continued to strengthen since the first quarter of this year.

Nexen also benefited from the ramp-up of production under a phase II expansion project at its European tire plant in Zatec, Czech Republic.

Nexen said output from the plant helped to increase sales of larger-diameter tires and improved cost-management of raw materials and shipping.

The Korean tire maker said it expects to realize further benefits from the expansion at Zatec, where production capacity is scheduled to reach 11 million tires per year.

However, Nexen cautioned that volatility of raw material costs and high shipping costs due to the Red Sea crisis would impact earnings in the remaining six months of 2024.

For the half year, Nexen reported a 34.3 percent jump in EBITDA to $161.7 million on 8.3 percent higher sales revenue of $1.07 billion. Sales in North America increased 10.6 percent to $273 million.

Nexen continues to evaluate sites in the U.S. for a third overseas factory, while acknowledging recently it is also looking at other potential locations for its next international factory.