Nexen increases revenue, earnings amid stable demand

Seoul – Nexen Tire has posted a 52% year-on-year increase in first quarter earnings (EBITDA) to KRW 64.5 billion (€43 million), on 6% higher sales of KRW640 billion.

Revenue growth was achieved through “stable sales volume” with average selling prices (ASP) showing “settled earning capability”, Nexen announced 9 May.

The tire maker linked the earnings improvement to “minimising off-season impact”, despite increases in the cost of raw materials and freight.

In terms of regions, the EU contributed most to sales, with 36% of overall revenue coming from the bloc.

First quarter sales in the EU grew 8.5% year-over-year to KRW240 billion, the tire maker reported.

In the OE segment, the region achieved “stable revenue”, through portfolio optimisation and despite disruptions in the automotive supply-chain due to the Red Sea crisis.

Replacement sales in the EU grew, particularly through an increase in the ratio of larger tires sold and higher demand for all-weather tires.

Nexen expects its sales in the region to grow gradually as it ramps up production at its tire manufacturing plant in Zatec, Czech Republic.

The tire maker has expanded its Zatec operation: adding a second facility with capacity to double production at the site to 11 million units per year.

Operations at the new factory started in the first quarter of the year with ‘full operation’ expected in 2025.

At KRW117 billion, North America was the second largest market for Nexen tires, contributing to 26% of total sales.

First quarter revenue was up 8.5% year-on-year, said Nexen, noting that the OE segment continued to supply “on the confirmed order volume.”

The solid OE sales scenario offset impacts from temporary closures and production cuts by a major customer.

Delivery issues and bad weather in January impacted the replacement segment, though Nexen said it is keeping sales ‘stable’.

The Korean group is also continuing efforts to improve sales-mix after a temporary decline in the proportion of larger tire sales.

Sales in Korea were flat at KRW111 billion, as the tire maker aims to ‘proactively respond’ to growing market demand for EV tires.

Other regions, including China and the Middle East, saw a 2.7% year-on-year growth in revenue, as demand picked up over the first three months of the year.