Why are leading companies seeing increased revenue but not increased profits?
Hankook Tire faced a situation of "increased revenue but decreased profit" in the second quarter of 2025. Sales increased by 8.4% year-on-year to 25.1 trillion won, but profits declined by 17.5% year-on-year to 346.4 billion won, dragged down by rising raw material costs, logistics expenses, and US tariffs. The company continued to optimize its business structure, with the proportion of 18-inch and larger tires increasing to 47.2%, and original equipment tires for electric vehicles accounting for 24% of sales. It also successfully expanded its customer base to include Lucid and Kia. Meanwhile, the newly acquired Hanon Systems thermal management business saw a 205% quarter-on-quarter profit surge.
■ Austrian polymer company Semperit saw its sales decline by 7.2% to €320 million in the first half of the year, and its EBITDA fell by 35% to €30.7 million, mainly due to the postponement of orders for conveyor belts and liquid silicone molding in the first quarter. In the second quarter, the company's sales increased by 11.3% quarter-on-quarter to €169 million, and profits increased by 76.2% to €19.6 million. The company maintains its full-year profit forecast of €65-85 million.
■ Japanese rubber products company Fukoku reported a 2.2% year-on-year increase in sales to ¥22.7 billion and a 2.1% increase in operating profit to ¥1 billion in the quarter ending June. Specifically, functional components sales increased by 9.1% to ¥10.3 billion (including orders for thermal pads), while profit decreased by 3.2%; vibration damping components sales decreased by 2.7%, but profit increased by 3.6%; and hose profits surged by 84%.
■ Finnish company Reka Rubber reported strong results for the first half of 2025, with sales increasing by 11% year-on-year to €16.3 million driven by increased volume, and EBITDA surging fourfold to €2 million. Despite uncertainty caused by US tariffs affecting demand from some customers, the company expects sales in the second half of the year to exceed the same period last year and announced the purchase of a new medium-sized injection molding machine (delivery in early 2026) to support the expansion of its molding products business.
■ Swedish pyrolysis company Enviro experienced a significant decline in performance in the first half of 2025, with an EBITDA loss of SEK 34.6 million (compared to a profit of SEK 67.2 million in the same period last year), and revenue plummeting 76.5% year-on-year to SEK 27.3 million. Despite short-term financial pressure, the company remains optimistic about the long-term growth in demand for sustainable materials. Equipment installation at its Udwala plant is progressing smoothly, with production expected to begin in the fourth quarter and deliveries to its joint venture, Infiniteria, by mid-2026.
■ Driven by strong sales of large-size tires in the North American market, favorable exchange rates, and lower costs, Toyo Tire's operating profit in the second quarter of 2025 reached a record high of ¥48.1 billion, prompting the group to raise its full-year profit forecast by 5.9% to ¥90 billion (but still below 2024 levels). Tire sales increased by 3.6% to ¥2.6 trillion, with profits in North America surging 21% to ¥10 billion, but profits in Japan declined by 16%.
■ Tokai Carbon's carbon black business performance declined in the first half of 2025, with EBITDA plummeting 20% year-on-year to 13 billion yen and sales down 5% to 75.5 billion yen, mainly due to continued production cuts by customers leading to lower sales volume, lower prices, and higher fixed costs. Although operating profit fell 25%, it still outperformed the company's initial expectations, exceeding forecasts by 9%. Meanwhile, its new factory in Thailand, which is expected to start production in mid-2025, will continue to drag down revenue until the third quarter of 2026 as it operates in parallel with existing production lines.
