High raw materials cost hits Hankook Tire’s Q1 margins

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High raw materials cost hits Hankook Tire’s Q1 margins

Hankook Tire, the world’s seventh-biggest tire maker by sales, on Friday posted a 13 percent year-on-year drop in its first-quarter net profit due to high manufacturing costs.

Net profit for the three months that ended on March 31 fell to 171.15 billion won ($151 million) from 196.66 billion won a year earlier, the company said in a statement.

“A rise in the cost of raw materials used to make tires in the first quarter affected earnings,” a company spokesman said.

The company added that as overseas markets account for 83 percent of Hankook’s total sales, unfavorable exchange rates affected the earnings repatriated when calculated in terms of the Korean won.

Operating profit also declined 8 percent to 230.95 billion won in the first quarter from 251.14 billion won a year earlier. Sales inched up 0.8 percent to 1.64 trillion won from 1.63 trillion won during the same period, the statement said.

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