Hankook Tire & Technology Co., the world's seventh-largest tiremaker by sales, said Friday its second-quarter net profit plunged 56 percent due to one-off gains reflected in the year-ago bottom line.
Net profit for the three months ended in June fell to 141.5 billion won (US$110 million) from 323.83 billion won during the same period of last year, the company said in a regulatory filing.
"The net plunge is due to a base effect in which about 100 billion won worth of proceeds from the sale of a logistics center in Busan was factored in the second-quarter net result in 2022," a company spokesperson said over the phone.
Operating income jumped 42 percent to 248.22 billion won in the second quarter from 175.27 billion won a year ago. Sales rose 11 percent to 2.263 trillion won from 2.039 trillion won during the same period.
"The quarterly bottom line got a boost from increased high-end original equipment (OE) tire supplies to carmakers amid eased chip shortages and robust sales of replacement equipment (RE) tires in the after-sale markets," the statement said.
OE tires refer to the products a tiremaker supplies to the assembly lines of a carmaker at wholesale prices. It is more profitable for carmakers to sell RE tires in after-sales markets.
Stabilizing raw material prices and delivery charges also helped the tiremaker's profitability, it said.
From January to June, net income plummeted 45 percent to 237.37 billion won from 323.83 billion won in the year-ago period.
The first-half net result was affected by strikes and a massive fire that took place at its Daejeon plant, 164 kilometers south of Seoul, in March.
On March 12, one of two production lines at the Daejeon plant was burnt down. The other line was not affected by the fire but is not yet fully operational.
The company estimated the walkouts and the fire caused about 40 billion won in operating loss for the January-June period.
Operating profit surged 46 percent to 439.16 billion won in the first six months from 301.34 billion won a year ago. Sales were up 14 percent to 4.368 trillion won from 3.83 trillion won.
Hankook Tire earns over 80 percent of its total revenue from abroad.
It has eight plants -- two in South Korea, one in Hungary, one in the United States, three in China and one in Indonesia -- whose combined capacity reaches 102 million tires per year.
Source: Yonhap News Agency