Nexen Tire Sees 20% Drop in Profits Due to Higher Materials and Freight Costs

Nexen Tire has reported a 20% decline in second-quarter profits, with operating profit down 19.5% year-on-year to KRW34.3 billion (€20.8 million), despite a 10.8% increase in sales to KRW891.3 billion. The decline in profits was attributed to higher raw material and freight costs, as well as non-recurring costs related to US anti-dumping duties. The company’s revenue growth was driven by strong sales in key markets, including Europe, where revenue reached KRW407.2 billion, a record high for a single quarter. Nexen also saw growth in Korea, with strong sales of EV and SUV tires, while sales in North America dropped by nearly 9% due to weaker demand and intensified competition. The company is expanding its lineup of OE vehicles and diversifying sales in the replacement market, and expects ‘tangible improvements’ in profitability with its European expansion and US retail strategy. Nexen’s CEO, John Bosco (Hyeon Suk) Kim, stated that despite growing cost pressures, the company has continued to achieve top-line growth on the back of strong sales in key markets, and expects more tangible improvements in earnings with the stable ramp-up of its European plant expansion and distribution improvements in North America.