For the final quarter of 2012, Nexen Tire Corp. reported sales of KRW 411 billion, a year-on-year increase of 2.4%, KRW 24 billion in operating income, a 90.1% increase on Q4 2011, a 5.7% operating margin and net profit of KRW 21 billion, up 12.1% year-on-year.

Commenting on these results, DB Equity Research Automotive analyst Sanjeev Rana refers to the Korean tiremaker as “an underperformer in the last three months due to concerns on its earnings delivery, weak overseas demand, unfavorable forex and low utilization of its new plant.”

While year-on-year results were up, Rana notes that operating profit was 38% below consensus and revenue, operating profit and net income were down 9%, 54% and 47%, respectively quarter-on-quarter, with operating profit margin considerably lower than the 11.4% recorded in the third quarter of 2012.Samsung Securities analyst P.J. Yoon added that operating margin would have come in at 9.5% in the final quarter were it not for bonus payments of KRW 15 billion, which served to offset the margin benefit brought about by falling raw material costs.

Yoon also reports that in the fourth quarter Nexen’s year-old Changnyeong plant shipped more than one million units for the first time, however the factory remained below breakeven point. Shipments have increased steadily, from 300,000 units in the second quarter to 830,000 in the third. Samsung Securities opines that the Changnyeong plant will turn a profit in the first half of 2013 on the back of growing original equipment shipments to overseas clients.As for full year 2012 results, at its 2013 annual general meeting today, Nexen reported that last year’s annual revenue was the highest-ever achieved by the company; in 2012 Nexen’s revenues amounted to KRW 1.7 trillion, a year-on-year increase of 18.9%. Operating income, up 58% on 2011 to KRW 176.9 billion, was also a record. Net income, at KRW 133.4 billion, was up 52.1%. (Tyres & Accessories)