Nexen Tire Corporation posts third-quarter revenue of 814.8 billion won, remaining in the 800 billion-won range for four consecutive quarters

[Financial News] Nexen Tire Corporation said on the 4th that its revenue for the third quarter of this year was 814.8 billion won, up 4.4% from the same period a year earlier. Revenue remained in the 800 billion-won range for the fourth consecutive quarter. The company said the result was achieved amid an unfavorable business environment, including slowing market demand and rising raw-material prices.
Revenue in Europe was 349.1 billion won, up 8.8% from the same period a year earlier, and accounted for the largest share of total revenue at 43%. North America accounted for 21%, South Korea 18%, and other regions 18%.
The share of high-value-added products, such as high-inch tires and all-weather and winter tires, also rose. High-inch tires measuring 18 inches or more accounted for 41.5% of tire revenue, up 3.4 percentage points from the same period a year earlier and 2.7 percentage points from the previous quarter. In Europe, high-inch tires’ share rose 7.3 percentage points to 32.2%. In the United States, the share recovered to the 50% range as the company expanded the range of high-inch sizes it supplies to major customers.
From January to September this year, revenue from all-weather tires rose 31.3% from the same period a year earlier, while revenue from winter tires increased 11.7%. Nexen Tire Corporation said the gains reflected the launch in Europe of the winter tire WINGUARD Sport 3 and, in South Korea, the United States and other markets, the all-weather tire N'BLUE 4Season 2.
New supplies continued despite sluggish growth in the original-equipment (OE) tire market amid weak global demand for new vehicles. The company is supplying N'FERA Sport for Audi’s new mid-size-to-large sedan, the new Audi A6, and has also begun supplying OE tires for the Kia Sorento and Hyundai Avante and Tucson, which recently received new models.
Profitability was affected by cost pressures. Raw-material prices and ocean freight rates rose because of external factors, including the war in the Middle East, pushing the cost-of-goods-sold ratio to 74.0%, up 2.6 percentage points from the same period a year earlier. The strength of the won also weighed on profitability. Nexen Tire Corporation expects an improved product mix to drive profitability higher once costs such as raw materials and ocean freight stabilize.
The briefing also outlined strategies for responding to global environmental regulations. In response to measures including the EU Deforestation Regulation (EUDR) and guidelines on environmental labeling and advertising (ECGT), the company is establishing a supply-chain management system and checking whether its products and marketing comply with the regulations.
A Nexen Tire Corporation official said, “It is significant that we continued to expand high-value-added products and grow our business, particularly in the European market, despite an unfavorable external environment.” The official added, “We will improve our product mix by focusing on all-weather and winter tires and high-inch products, and proactively respond to global regulations to restore profitability.”
[email protected] Kim Dong-chan Reporter