Hankook Tire & Technology Co Ltd (161390) Q1 2025 earnings summary

Executive summary

• Consolidated revenue reached KRW 4,963.7 billion in Q1 2025, with operating profit at KRW 354.6 billion and an operating margin of 7.1%.

• Net income attributable to owners was KRW 320 billion, with basic EPS of KRW 2,621.

• Tire business revenue grew 10.3% year-over-year, but operating profit declined 16.3% due to higher raw material and shipping costs.

• Completed acquisition of Hanon Systems, expanding into automotive thermal management.

• Thermal management business revenue increased 8.9% year-over-year, but operating profit dropped 68.5% due to cost pressures and changes in R&D capitalization.

Financial highlights

• Gross margin for the group was 19.4% in Q1 2025.

• EBITDA totaled KRW 6,653 billion, with a margin of 13.4%.

• Debt-to-equity ratio remained stable at 99.3%.

• Shareholder’s equity stood at KRW 121,209 billion.

• Cash and cash equivalents at period end: KRW 2.40 trillion.

Outlook and guidance

• Aims for revenue growth exceeding market demand and double-digit operating margin in the 10% range for 2025.

• Plans to expand high-inch and EV tire portfolio, targeting ≥18-inch tire sales ratio above 50% and EV tire ratio within PCLT OE at 29%.

• U.S. plant expansion in Tennessee is being accelerated to mitigate tariff risks, with initial production expected in 2H 2025.

• Focus on global expansion, R&D, and premium product growth in both tire and thermal management segments.

• Continued investment in production capacity and sustainability initiatives.