Kumho makes fast financial recovery
Kumho Tire Corp. posted net income of 53.9 billion won on revenue of 628.1 billion won for its second quarter ending June 30, 2010. That compares to a net loss of 113.2 billion won on sales of 468.6 billion won for the same period in 2009.
Based on the exchange rate on June 30, 2010, Kumho recorded net income of $44.2 million on sales of $515.8 million for 2Q 2010.
The company's operating profit also increased, from minus 44.9 billion won last year to plus 66.9 billion won this year.
The results follow a profitable first quarter, in which the company announced net income of 20.7 billion won on sales of 586.4 billion won.
Kumho credits its recovery largely to the following:
1. the "normalized operation" of its domestic and foreign plants. The company says it is running at 95% capacity worldwide.
2. the "continuous increase" in sales volume -- with the peak summer season ahead. Sales in Korea were up 4% in the second quarter, and 7% abroad. Kumho says its ultra-high performance tire sales in North America were up 40%.
3. cost cutting led by the pact with its union (see "Kumho, union reach agreement in South Korea").
“Kumho Tire’s financial structure has been rapidly improving as its business normalization plan has been implemented as planned," says Joo Wan Hong, Kumho's director of investor relations. "As a result, the company’s overall competitiveness in sales and manufacturing sector is recovering faster than expected.
“As we clearly witness the positive impact of wage adjustment and productivity gains, Kumho Tire forecasts sales boost in domestic market and continued profits abroad as well.”