Nexen posts strong results amid ramp-up of production in Europe

Seoul – Nexen Tire has delivered record quarterly revenue and significant earnings (EBITDA) growth in the three months to end of June, helped by a strong performance in Europe.

Despite ‘unfavourable markets’, Nexen's second quarter earnings rose 38% year-on-year to KRW120 billion (€81 million) on 10.5% higher sales of KRW764 billion.

The gains were linked to higher sales volume and improved product mix, according to the Seoul-based tire maker's 31 July results announcement.

Revenue grew across all regions compared to the same period last year, particularly in Europe, where volumes increased ahead of the peak winter tire season.

Furthermore, Nexen noted that business with OE tire suppliers had continued to strengthen since the first quarter of this year.

Nexen also benefited from the ramp-up of production under a phase II expansion project at its European tire plant in the Czech Republic.

Nexen said output from the facility in Zatec helped to increase sales of larger diameter tires and improved cost-management of raw materials and shipping.

The Korean tire maker said it expects to realise further benefits from the expansion at Zatec, where production is targetted to reach 11 million tires/year.

However, Nexen cautioned that volatility of raw material costs and high shipping costs due to the Red Sea crisis would impact earnings in the remaining six months of 2024.

Breaking down it results by region, Nexen said OE sales increased in both North America and Europe, supported by “solid new car sales” particularly in Europe.

The company said it aims to further expand its reach in Europe, focusing on OE and 18-inch and bigger tires, following the ramp-up of its expansion.

Replacement tire demand remained “solid” overall, excluding in China where the 'comparison base was high', the group noted.