Kumho Tire sees credit rating jump as earnings, debt outlook improve

Kumho Tire's research and development center in Yongin, Gyeonggi Province / Courtesy of Kumho Tire

Kumho Tire said Tuesday that Korea Investors Service (KIS), one of the country’s leading credit rating agencies, raised its corporate credit rating two notches to A+ with a stable outlook, from A0 with a stable outlook, citing stronger earnings and a reduced debt burden.

KIS cited three factors driving the upgrade: a more stable global operating base, improved earnings power through a shift toward higher-margin products and debt reduction funded by operating cash flow.

In its report, the rating agency determined that Kumho Tire has built a resilient business structure capable of withstanding external volatility, supported by diversified key clients and a broader network of domestic and overseas production facilities.

The rating agency pointed to the company’s aggressive expansion of distribution channels in North America and Europe as a key driver of its recent earnings gains.

Kumho Tire said it has been increasing its share of higher-value products, including large-diameter tires and its electric-vehicle line, EnnoV, which it said has helped drive record results.

The rating upgrade is expected to improve Kumho Tire's access to capital markets on more favorable terms, while also strengthening brand credibility and sales competitiveness.

The company achieved 4.7 trillion won ($3.1 billion) in sales and an operating profit of 575.9 billion won in 2025, translating into an operating margin of 12.2 percent.

For 2026, Kumho Tire has set a sales target of 5.1 trillion won and plans to expand its portfolio around large-diameter and premium tires.

"We will demonstrate strategic flexibility in responding swiftly to shifts in the market environment, while solidifying our financial structure and further strengthening business stability," the company said in a statement.

This article was published with the assistance of generative AI and edited by The Korea Times.