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July 27, 2015

SOUTH KOREA: Currency hits Hyundai first half results

Hyundai Motor's sales volume, revenue and operating profit for the first half of 2015 all declined on a year on year basis due mainly to the strong won (especially against the euro) and other unfavourably currency movements.

Hyundai Motor’s sales volume, revenue and operating profit for the first half of 2015 all declined on a year on year basis due mainly to the strong won (especially against the euro) and other unfavourably currency movements.

Sales revenue fell 1.4% to KRW43.76 trillion (US$37.3bn) while operating profit and net profit also fell 17.1% and 13.8% to KRW3.34 trillion and KRW3.77 trillion, respectively.

Global unit sales fell 3.2% to 2,415,777 units with slow growth in emerging markets and currency fluctuations the main reasons.

Second quarter sales revenue actually increased 0.3% to KRW22.82 trillion on global sales of 1,232,943 units but both operating profit and net profit declined 16.1% and 23.8% to KRW1.75 trillion and KRW1.79 trillion, respectively.

An unfavourable business environment is likely to continue in the second half, the automaker said. Major markets such as China and some emerging markets will continue posting slower growth, leading to more competition between automakers.

The company expects some offset from the redesigned Tucson and new models like the ix25 and Creta, which are continuing its new model launch effect. Especially, additional introduction of new models will refresh Hyundai Motor’s sales momentum.

A recent weakening of the won against the dollar may also help the company regain profit growth in the second half.

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