Hankook & Company has reported that the operating profit of Hanon Systems, an acquired thermal management company, has decreased by nearly 70% in the first quarter compared to the same period last year. This is due to the combined effects of tariff burdens and a workforce restructuring.
Hanon Systems announced on 8th that its revenue in the first quarter increased by 8.9% year-on-year, reaching 2.6173 trillion won. However, operating profit during the same period decreased by 68.5% to 20.9 billion won.
Revenue increased due to increased production volume and favorable exchange rate effects. Operating profit decreased due to the tariff policies of the Donald Trump administration, ongoing workforce restructuring, a reduction in the capitalization of research and development expenses, and increased depreciation expenses.
Hanon Systems has production facilities in the United States, but it is known to face profitability impacts due to tariffs since it imports compressors manufactured in Mexico and Canada to final assembly.
However, compared to the previous quarter, which recorded a loss of 137.6 billion won in the fourth quarter of last year, it has turned a profit. The company explained that an increase in one-time payment expenses such as retirement payments due to restructuring led to a loss in the 1 billion won range in the fourth quarter of last year.
Hanon Systems is focusing on long-term financial stability and structural improvement under the new management. The revenue share of the electrification sector has slightly increased to 27%, up from 25% at the end of last year. Hanon Systems is forecasting that the revenue share from electrification will expand to about 30% with the launch of new electric vehicles from global clients.