Korean tyre giant on path back to profit
Corporate restructuring and a kinder business environment have been good to Kumho Tire Co.The largest tyre manufacturer in South Korea is in the black for the second consecutive quarter. According to a press release issued yesterday, Kumho Tire Co has seen revenue improve 34 per cent for Q2, 2010. Operating profit of AUD $62.5 million for the quarter provided a profit margin of 10.7 per cent.
Net profit of $50.4 million reported for the quarter ending June 30 marked a strong recovery against the backdrop of a $105.7 million loss for the same period in 2009. The latest financial result builds on the company's profitable result in the first quarter of the current financial year.
Seasonal demand has boosted revenue and new agreements between labour and management have contributed to the results.
"The financial structure has rapidly improved and our competitiveness in sales and production has recovered more quickly than expected," Kumho 's executive director of finance, Ju-Wan Hong, was quoted as saying in the press release.
"We can see the direct effects of our plan to improve competitiveness mainly in cost reduction and productivity improvement. We also expect continued recovery in the domestic market and in overseas demand."
The financial restructure led to borrowings reduced by 40 per cent, year on year.
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