Hankook Posts 22% Full-Year Fall

Hankook Tire Co., South Korea’s largest tyremaker, posted a 22 per cent drop in full-year profit, citing higher materials costs and a stronger South Korean won as the primary reasons.

Net income for the company during 2006 was 166.8 billion South Korean won (£91.5 million), compared with 213.8 billion won a year earlier. According to regulatory filings, Hankook’s sales rose 2.9 per cent to 2.08 trillion won. Full-year profit fell after rubber and oil prices reached record highs, and a stronger won also cut the repatriated value of the Hankook’s overseas earnings.

This year the company says it expects healthier results, with net income to rise by 36 per cent to 226.9 billion won, aided by exports and increased sales to premium automakers, including Audi China. Sales will most likely increase by 9.1 per cent to 2.27 trillion won, it added.

Hankook says during the previous year it paid 52 per cent more for natural rubber, the company’s main raw material. The price of synthetic rubber also rose 6 per cent. South Korea’s currency was 7.8 per cent stronger than a year earlier.