Kumho Tire Increases Q1 Revenue – but Income Remains in the Red

The Kumho Asiana Group has posted its first quarter 2008 results, and despite achieving what the company has called ‘favourable business results’ group-wide and increasing revenue in its Kumho Tires business division, income figures for the company’s tyre operation continued to be negative.
The entire group recorded the highest quarterly revenue in the company’s history, KRW4.98 trillion (£2.45 billion). From this came an operating income of KRW270.2 billion (£132.93 million) and net income of KRW41.1 billion (£20.22 million). Kumho Tires posted an increase in revenue of KRW 71 billion (£34.93 million) or 15.6 per cent to reach a figure of KRW 524.7 billion (£25.81 million). Similarly, operating income rose by KRW 6.7 billion (£3.30 million) or 30.3 per cent compared to the same quarter last year, to KRW 28.8 billion (£14.17 million). The operating margin was 5.5 per cent.

Despite these favourable results, Kumho Tires’ income before income taxes and net income continued to register losses of KRW -36 billion. This figure, says kumho, reflects losses arising out of the valuation of equity method investments pertaining to Kumho Tires’ overseas holdings – the company has several production plants that are still in their first few years of operation which has added to costs – and a one-off loss from euro hedging.