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Decrease in 2Q sales forces Hankook to change forecasts

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Hankook Tire Co. recorded net income of 43.9 billion won on sales of 520.4 billion won for the second quarter ended June 30, 2006. That compares to income of 57.7 billion won on sales of 524 billion won for 2Q 2005.

Based on the United States-Korea exchange rate at the end of the second quarter, Hankook posted net income of $46.2 million on sales of $548 million.

Compared to the second quarter of 2005, income was down nearly 24% and sales were down 0.7% (although Korean shipments were up 4.4%). Second-quarter operating income of 47.8 billion won ($50.4 million)was down almost 33% compared to 1H 2005.

For the first half, Hankook posted net income of 100.4 billion won ($106 million) on sales of one trillion won ($1.05 billion).

Following its first-half results, Hankook revised its 2006 full-year sales target from 2.16 trillion won to 2.11 trillion won, a decrease of 46 billion won. Initial goals for gross profit, operating profit and EBITDA also were lowered.

The results are not consolidated, and do not include Hankook's Chinese production.

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