Hankook Continues to Grow Sales in Q3, Operating Profit Down

Record quarterly sales in the emerging markets of Korea, China and Hungary helped Hankook achieve growth in sales following the slight downturn in 2010’s second quarter, though year-on-year operating profit remained 40.6 per cent down on the Korean manufacturer’s 2009 results. Sales topped 1.5 trillion South Korean won (£840 million), recording 7.1 per cent year-on-year increase. The company’s third quarter operating profit was KRW163.4 billion (£91.5 million), 8 per cent down on the second quarter, where rising raw materials costs have continued to be a factor. Hankook stated it aims to achieve a sales target that exceeds KRW5 trillion (£2.8 billion) this year.

Hankook’s continuous growth in sales every quarter in 2010 has been aided by markets in Korea, China and Hungary, all of which marked highest ever quarter records. Sales from these countries showed 10.1, 6.6, and 13.7 per cent YoY growths respectively. The increasing demand from emerging markets such as the CIS region and Latin America also contributed to the company’s strong sales performance; sales rose 51.2 per cent from the second quarter this year in the former, which is also a 28.7 per cent YoY increase. Hankook said its “vigorous marketing strategy” in Latin America paid off with a 72.5 per cent YoY surge.

Hankook also explains that its growth was achieved with support from strong ultra-high performance tyre sales, which “attracted more global customers”. Overall global sales of UHP tyres saw a 30 per cent YoY increase; sales figures saw steepest rises in the Americas and Asia Pacific markets. Original equipment UHP supplies produced in Korea and China were up 82.7 and 51 per cent respectively from the same period last year. The manufacturer says to its recently expanded global OE portfolio to leading automobile manufacturers is “due in part to an increased brand value” and consumer trust.

Seung Hwa Suh, vice chairman and CEO of Hankook Tire said: “Hankook Tire’s untiring growth momentum is evident in the quarterly announcements made this year. As we reach our 70th anniversary in 2011, I am positive that we can end this year fulfilling the goals we had set earlier and get ready for a new era of sustainable growth.”