Hankook Tire Co. Ltd. reported a recurring profit of $66.4 million on sales of $897 million for the first quarter ended March 31, 2007. That compares to a recurring profit of $80.6 million on sales of $752 million for the same period in 2006.
Ultra-high performance tire sales accounted for $68.4 million in global sales, a comparative increase of 21% (overall sales were up 14.6%). Close to 90% of the UHP sales were overseas.
Another strong growth area for Hankook was sales to overseas original equipment manufacturers, which increased 48% to $47.1 million.
"Recent deals, such as contracts to supply tires to premium automakers including Audi, will continue to build our OE business and our global brand equity," says Hyun Bum Cho, chief strategy and financial officer. "Our continued sales growth, despite increases in our product price, clearly validates our long term strategic investments in technology and marketing activities throughout the world."
Regional results
1. North America recorded a 2% year-on-year increase to $104.1 million in the context of a 5.5% price increase.
2. European sales increased by 23% to $137 million in spite of a 4.5% price increase and were boosted by a series of impressive industry tire reviews.
Later this year, Hankook says it will open its first 500 million euro European production facility in Hungary "to meet the overwhelming demand from the region."
3. Sales in China and Korea increased by 23% and 9%, respectively, and totaled $474.2 million.
The company is expanding its China production facilities, which will raise capacity to 28 million by the end of 2009. It also has begun rolling out its T-Station one-stop auto-after-service franchise to build further brand awareness in the increasingly competitive market.
4. Sales in Latin America, the Asia-Pacific region, Africa and the Middle East increased by 6% to $111.9 million.
Consolidated operating profits fell by 7.6% as the company built up its production capacity and fostered further brand equity in overseas markets.
"We are well positioned to meet all our targets this year, and continued investment in R&D, production and marketing activities will ensure the long term success of the company and our brand," says Cho.
For more information, please visit Hankook's Web site at www.hankooktire.com.
