[Edaily Reporter Kim Hyung-wook ] NEXENTIRE(002350)Nexen Tire’s operating profit for the second quarter fell 19% year-over-year due to the impact of U.S. anti-dumping duties and rising costs stemming from political instability in the Middle East. However, revenue increased by 11% as the company continued to grow its business, particularly in the European and South Korean markets.

NEXENTIRE held an investor briefing on the 29th and announced that it recorded consolidated revenue of 891.3 billion won and operating profit of 34.3 billion won for the second quarter of this year. Revenue increased by 10.8% year-over-year, but operating profit decreased by 19.5%.

The main factor behind the decline in second-quarter operating profit was the reflection of the final ruling on anti-dumping duties imposed by the United States. The U.S. had previously imposed a 4.09% anti-dumping duty on NEXENTIRE’s products manufactured in South Korea, but the Department of Commerce nearly doubled this rate to 8.02% in its final ruling earlier this month. NEXENTIRE’s operating profit fell significantly as it recognized the difference between the previous and new rates as a one-time charge.

In addition, regarding the 24.4% anti-dumping duty imposed by the EU earlier this month on products manufactured at NEXENTIRE’s Chinese plant, the company faced the burden of shifting production from its Chinese plant to its Czech and Korean plants in advance to prepare for the EU’s measures. Last year, products from the Chinese plant accounted for 15% of NEXENTIRE’s sales volume to Europe, but the company has reduced that share to 4% as of early this year.

In addition, rising tire material and transportation costs following the conflict in the Middle East, slowing growth in high-price markets such as North America, and an increase in the share of relatively low-margin original equipment (OE) tires all contributed to the decline in operating profit.

Net income for the second quarter also plummeted by 98.9% to 200 million won, down from 19.2 billion won last year. This was due to a temporary increase in corporate income tax of 19 billion won (from 8.6 billion to 27.6 billion won), resulting from the company’s decision to pre-recognize as an accounting expense the corporate income tax expected to be incurred by its European subsidiary in the future (recognition of deferred income tax liability), in addition to the decline in operating profit.

However, revenue growth continued, particularly in Europe and South Korea. Second-quarter revenue in Europe reached 407.2 billion won, a 20.6% year-over-year increase, surpassing the 400 billion won mark for the first time in a quarter. Revenue in South Korea also rose by 20.3% to 149.5 billion won. The revenue share of high-value-added products—tires 18 inches and larger—also rose by 3.6 percentage points year-over-year to 38.8%. However, North American revenue (178 billion won) fell by 8.7% due to slowing demand and adjustments to distribution channels, dragging down overall revenue growth.

NEXENTIRE plans to improve its performance by expanding the supply of original equipment (OE) tires for new electrified vehicle models—such as the BYD and Hyundai Staria EV—and core models from premium brands, as well as by expanding into major retail channels like Walmart and increasing the supply of high-inch products.

A NEXENTIRE official stated, “Despite an environment where cost burdens have increased due to external factors, we continued to achieve revenue growth based on strong sales in key markets,” adding, “We will drive tangible improvements in performance by ensuring stable operations of the second phase of our European plant expansion and capitalizing on the results of our North American distribution restructuring.”