Profit at Hankook Tire dips on won, materials

Hankook Tire Co., Korea’s biggest tiremaker, posted a 22 percent fall in full-year profit on higher materials costs and a stronger won.
Net income in 2006 was 166.8 billion won ($178 million), compared with 213.8 billion won a year earlier, the Seoul-based company said. Sales rose 2.9 percent to 2.1 trillion won, it said in a regulatory filing.
Hankook’s full-year profit fell after rubber and oil prices reached record highs. A stronger won also cut the repatriated value of the tiremaker’s overseas earnings.
The company expects to boost net income 36 percent this year to 226.9 billion won, helped by exports and higher sales to premium automakers, including the Chinese operations of Volkswagen AG’s Audi AG unit, it said. Sales will probably rise 9.1 percent to 2.3 trillion won, it added.
Michelin & Cie, the world’s largest tiremaker, owns 6.2 percent of the company.
Hankook Tire paid 52 percent more for natural rubber, its main raw material, last year, it said. The price of synthetic rubber also rose 6 percent, it added.
Hankook’s 2006 operating profit, or sales minus the cost of goods sold and administrative expenses, fell 24 percent to 174.5 billion won.
It plans to pay a dividend of 250 won a share.