Hyundai Motor has posted a first half decline of 37.1% to operating profit as it was hit by a strong Korean currency and higher costs.
The profit decline came in spite of higher sales.
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In the first half of 2018, Hyundai Motor's sales totalled 2.24m units, a rise of 4.5% from the same period last year. Favourable sales in major regions and continued sales momentum of new SUV models like Santa Fe, Kona were the reasons for the increase.
The company posted first half revenue of KRW47.15tn (US$42,13bn) compared to KRW47.67tn in the same period of 2017. Stronger KRW against major currencies and weak currency values in emerging economies weighed on the result.
First half operating profit totalled KRW1.63tn, representing a 37.1% decrease from a year earlier, while the company posted a net profit of KRW1.54tn, 33.5% lower compared to the same period in 2017. Profitability weakened largely due to unfavourable currency environment and increased fixed costs.
In the second quarter, Hyundai sales totalled 1.19m units, posting revenue of KRW24.71tn. Operating profit totalled KRW950.8bn.
While uncertainty in the global business environment is likely to continue for the time being, Hyundai Motor says it will continue strengthening its product competitiveness in the global market as well as build a strong foundation for sustainable growth.
The company plans to improve its product mix with the launch of a variety of strategic models, with stronger focus on expanding production and sales of SUV models. The company will also strengthen its overall research and development capabilities to introduce new mobility services.
Analysts say that Hyundai is vulnerable to a number of negative developments in its outlook, including adverse currency movements, a deteriorating international trade environment and highly competitive conditions in the US market.
