Hankook reports 32% drop in earnings despite higher sales

SEOUL, South Korea—Hankook Tire & Technology Co. Ltd. reported 32.3 percent lower operating income for the quarter ended March 31 despite 10.8 percent higher sales, results the company tied to global supply-chain disruptions, rising raw material prices, the resurgence of COVID-19 and geopolitical issues.

For the quarter, operating income fell to $104.6 million on sales of $1.49 billion, yielding an operating ratio of 7 percent, down four-plus points from a year ago.

Hankook attributed the higher sales revenue to "effective pricing and distribution strategies" in major markets and a steady shift to higher value-added, larger rim-diameter tires.

North America led the way in sales, generating 22.5 percent higher revenue in the quarter of $424.4 million. Europe, the company's largest geographical division, reported 9.8 percent higher sales, with China and South Korea reporting 7.6 percent and 2.2 percent gains, respectively.

Hankook said it expects double-digit revenue growth this year on the strength of higher sales of its larger-diameter tires, a sharpened focus on building share in the electric vehicle tyre segment, strengthened OE ties with leading vehicle makers and expanded regional distribution channels and sales.

Earlier this month, the company established a corporate governance charter with the intent to provide transparent environmental, social and governance (ESG) management.