Hankook Tire Reports Record Sales and Operating Profits in 2009

Hankook Tire has reported record global sales and operating profits of 4.8 trillion (£2.604 billion; 2.985 billion euros) and 549.3 billion won respctively. In the period global sales grew 18 per cent year-on-year, while operating profits shot up nearly five-fold (2008: 114.2 billion won), despite the global recession. 2009 also saw the company’s European production centre in Racalmas, Hungary turn a profit after sales shot up 55 per cent year-on-year (see table). Now the company’s management has raised the bar for 2010 with a global sales target to exceed 5 trillion won (£2.717 billion; 3.109 billion euros) for the first time in its history.

Hankook Tire reported that it remains market leader in the rapidly growing Chinese market after a 54 per cent increase in local sales to carmakers this year due to the drastic expansion of the Chinese automobile market. In addition, Hankook Tire’s presence in the Korean replacement market reportedly resulted in substantial growth. Middle East sales increased by 25 per cent, apparently through the company’s emphasis on driving further expansion in emerging markets.

Overall global sales of UHP recorded a 9.6 per cent year-over-year increase. In particular, Hankook Tire’s UHP supplies to global carmakers sky rocketed worldwide and in China with 129 per cent and 46 per cent year-over-year increases respectively.

Reporting the news in an official statement dated 18 January, company representatives said Hankook Tire has “kept intense focus on enhancing global marketing strategies including diversification of markets and increasing effectiveness of the SCM(Supply Chain Management) system.” Another key driver of Hankook’s successful business last year was said to have been “the establishment of solid footholds in diverse regions, embracing the economic downturn as an opportunity to capture market share…actively responding to customer demand.”

Seung Hwa Suh, vice chairman & CEO of Hankook Tire stated: “We are proud of our astounding achievements in 2009 which was based on our market diversification strategies and our priority on attaining premium quality.” Suh added: “In 2010, we set another aggressive sales target at KRW 5.1 trillion and will continue to prove that we are making sustainable growth worldwide. We also aim to expand the global customers’ trust through ongoing efforts for customer safety and the environment as a leading global company.”

Analysts: Hankook aiming to raise average price 11%
 
Meanwhile, in an investor’s note dated 18 January, Deutsche bank analysts reported that Hankook Tire is aiming to increase average selling prices 11 per cent in dollar terms “but actual hikes could be higher.”

Hankook is also said to be targeting 2010 revenue and operating profit growth of 13 and 15 per cent year-on-year respectively, which 4 per cent and 7 per cent higher than Deutsche Bank estimates. According to the analysts the main risk that could prevent Hankook from achieving this is the recent steady rise of rubber prices, with the company predicting natural rubber could go up 30 per cent year-on-year in 2010.

With Hankook likely to make a decision on the plant it is said to be planning to build in South East Asia, as some point in the first half of 2010, this year looks set to be another interesting one for this South Korean tyre manufacturer.

2009 Consolidated Profit – Global (Tyre Sales Only)

2009 Consolidated Profit – Hungary (Tyre Sales Only)

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