SEOUIL, April 25 — Hyundai Motor, South Korea’s top automaker, said Thursday
that its first-quarter operating profit reduced due to a fall in auto production
at domestic plants coming from the shift change.
Operating profit was 1.87 trillion won (1.68 billion U.S. dollars) in the
three months ending March 31, down 10.7 percent from the same period of last
year, according to an e-mailed statement.
Sales increased 6 percent from a year before to 21.37 trillion won in the
first quarter, but net profit declined 14.9 percent to 2.09 trillion won.
Hyundai’s global auto sales rose 9.2 percent from a year earlier to 1,171,804
units in the first quarter, leading to the revenue growth.
Operating profit and net income, however, reduced due to supply disruption at
local plants stemming from the shift change. Local car sales slid 0.7 percent to
153,728 units in the first quarter amid weak domestic demand, and exports of
cars manufactured in domestic factories declined 10.9 percent to 293,011
units.
Sales of cars, which were made in overseas plants and sold there, surged 23.1
percent to 725,065 units in the first quarter, offsetting the negative effect
from the shift change. Demand from China led the overseas sales growth, with car
sales there surging 40.7 percent in the cited period.
“Revenue increased thanks to rising car sales, but operating profit decreased
due to falling car production in local plants arising from the reduced weekend
extra work,” said an official at the company.
Stronger won and one-off allowances related to recalls in Seoul and
Washington lifted operating costs, driving down the operating profit margin to
8.7 percent in the first quarter from 10.4 percent a year earlier.
Earlier this month, Hyundai unveiled its plan to recall around 110,000
vehicles sold in South Korea and about 1.1 million cars sold in the United
Statesfor the stop-lamp defects. Due to the same fault, its affiliate Kia Motors
said it would recall around 50,000 cars in South Korea and more than 600,000
vehicles in the U. S.
The won/dollar exchange rate averaged 1,085 won during the quarter, down 4.1
percent from the first quarter of last year. The won’s ascent reduced profits
repatriated from overseas sales.
Market watchers forecast Hyundai’s operating profit would rise in the second
quarter thanks to the normalization of production at domestic plants. “Hyundai’s
operating margin should improve to double-digit levels from the second quarter
on the back of normalized production at its domestic factories and the expected
launch of a number of new models,” said Kim Yoonki, an analyst at Mirae Asset
Securities in Seoul.
The devaluation of the Japanese yen had yet to have a negative impact on
Hyundai’s car sales in the overseas market. “In China, Hyundai’s car sales
surged 40.7 percent in the first quarter from a year earlier, but sales by
Nissan and Toyota declined 15.1 percent and 12.7 percent respectively,” said Suh
Sungmoon, an analyst at Korea Investment &Securities.
The South Korean won appreciated 14.4 percent versus the Japanese yen during
the first quarter, the highest since the 14.5 percent gain in the second quarter
of 2009. It boosted fears over the worsening of the price competitiveness of
South Korean exporters.
Shares in Hyundai Motor closed at 197,000 won on the main bourse, up 6.49
percent from Wednesday’s close.
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