Weaker currency and one-off costs hit Hyundai Motor profits in the first quarter despite a 6.0% year on year increase in sales.

Sales rose to KRW21.37 trillion thanks to strong sales outside Korea and the addition of a subsidiary, Hyundai KEFICO. However, operating profit and net profit fell 10.7% and 14.9% to KRW1.87 trillion and KRW2.88 trillion (including non-controlling interest), respectively, mainly because of increased costs due to a weaker currency and increased one-time provisions.

Hyundai sold 1,171,804 units globally, a 9.2% increase. While sales in Korea fell 0.7%, overseas sales rose 10.9% to 1,018,076 units.

Production volume at Korean plants declined during the first quarter due to some production stoppages on weekends which increased fixed costs. Earnings are forecast to improve once issues over shift changes are resolved with workers.

Hyundai forecast that major auto markets, including some emerging markets, will keep posting slower growth amid fiercer competition and uncertain business environments.

Show the press release

 

Hyundai Motor Announces 2013 1Q Business Results
 
- Sales revenue rises 6.0% on continuing sales growth in overseas markets
Hyundai to keep focusing on qualitative growth 

 
Apr. 25, 2013 - Hyundai Motor Company today announced 2013 first-quarter earning results. Despite various unfavorable internal and external factors, its continued sales growth overseas led to a 6.0 percent increase in sales revenue, compared to the same period last year.
                                                                        
For the first three months of 2013, sales revenue rose 6.0 percent to 21.37 trillion won (auto: 17.66 trillion / finance and others: 3.70 trillion) from a year earlier, thanks to strong sales outside Korea and the addition of a subsidiary, Hyundai KEFICO. However, operating profit and net profit fell 10.7 percent and 14.9 percent to 1.87 trillion won and 2.88 trillion won (including non-controlling interest), respectively, mainly because of increased costs due to a weaker currency and increased one-time provisions.
 
Hyundai sold 1,171,804 units globally (Korea: 153,728 / overseas: 1,018,076) during the first quarter this year, a 9.2 percent increase from a year earlier. While its sales in Korea fell 0.7 percent from the same period a year ago, its overseas sales rose 10.9 percent to 1,018,076 units, offsetting the decline in the domestic market.
 
Hyundai’s production volume at its Korean plants declined during the first quarter due to some production stoppages on weekends, which increased fixed costs. However, once this issue is resolved, coupled together with a more stable outlook on currency exchange rates and Hyundai’s ongoing robust sales in overseas markets such as China and Brazil, the company’s earnings are forecast to improve going forward.
 
Hyundai forecasts that major auto markets, including some emerging markets, will keep posting slower growth amid fiercer competition and uncertain business environments. Nevertheless, Hyundai aims to strengthen its fundamentals through qualitative growth and quality management. To do so, Hyundai plans to launch local strategic models, reinforce sales and service networks, as well as carry out aggressive marketing activities. 
 
Such efforts have already been in progress, posting significant results. The HB20, which rolled off Hyundai’s new Brazilian plant since October last year, won five major local awards including the 2013 Brazilian Car of the Year. By strengthening its dealer network, Hyundai’s market shares in European and Indian markets are on the rise. In the U.S., cumulative sales of the Elantra exceeded 2 million units since it launched in the market in 1991, due to differentiated marketing strategies based on enhanced quality.

 

Original source: http://globalpr.hyundai.com/prCenter/news/newsView.do?dID=1741