Hyundai Motor beat forecasts with a record quarterly profit after government incentives resulted in strong global sales of its cheap, fuel-efficient models but cautioned varied factors might hit future earnings.
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Hyundai tripled Q3 net profit while Honda Motor was the only major Japanese car maker expected to post an operating profit in the fiscal first half.
The Korean automaker posted a net profit of KRW979.1bn (US$832m) in the third quarter, over triple the KRW264.8bn a year ago and beating a KRW616.3bn forecast by 11 analysts in a Reuters poll. Net profits were boosted by equity gains from overseas units, the company said.
Operating profit of KRW586.8bn beat a forecast of KRW561.2bn as sales rose 34% to KRW8.1 trillion.
Analysts are likely to raise estimates for Hyundai’s full-year profit, centred around $1.7bn, following the results, Reuters said, noting that only VW was expected to post a higher annual net profit, at around EUR1.3bn ($1.95bn).
“These are amazing earnings,” Kazutaka Oshima, CEO at Rakuten Investment Management in Tokyo, told the news agency. “The figures reflect Hyundai’s increased share in the Chinese and North American markets, and that’s a threat to Japanese automakers.”
Hyundai warned a firmer won, rising oil prices and higher interest rates might hit earnings in the months ahead and its shares were little moved after a 50% surge in the third quarter.
“Third-quarter earnings came very strong and the fourth quarter could be also excellent, thanks to the new model launch, but momentum is likely to slow next year,” Choi Jong-Hyeok, a fund manager at Midas Asset Management told Reuters. “It will be difficult to beat this year.”
Hyundai expects global car demand to grow up to 5% next year on an economic recovery, a company executive told the news agency after the results announcement.
“We see global demand of about 57m units industry-wide this year. That would grow between 4.6 and 5% to about 60m vehicles next year,” Chung Tae-hwan, the company’s chief financial officer, said.
