By Oliver Hall
Kumho is the latest tyres manufacturer to report positive results for the first half of the year.
It is the second consecutive quarter that the South Korean tyres manufacturer has achieved strong gains, with its revenue increasing 34% year on year.
Since entering into a debt work-out in January 2010, Kumho has returned into the black in the first quarter of the current fiscal year and has maintained its surpluses by recording a double-digit operating profit margin in the most recently completed quarter.
The company reports its debt ratio has fallen below 300%, the level before the work-out and an amount it says signals the results of its efforts for successful management normalisation.
Kumho states these positive business results can be attributed to revenue growth from the normal operation of its domestic and overseas plants, plus high seasonal demands, as well as the reduction of costs resulting from labor-management agreements.
During the second quarter, Kumho Tire recorded a plant operation rate of about 95%, which it says is the normal level. The company also recorded domestic sales growth and overseas sales growth of 4% and 7%, respectively.
Ju-Wan Hong, executive director of finance for Kumho, said: “The financial structure is rapidly improving, as we have successfully realised the management normalisation plan, and our competitiveness in sales and production is being recovered more quickly than had been expected.
“We can see the direct effects of our plan to improve competitiveness mainly in salary adjustment and productivity improvement, and we also expect recovery in the domestic market and continuing overseas demand.”