Hyundai Motor reported a surprise 1.7% rise in quarterly profits on Tuesday, boosted by a lower tax burden and smaller losses at the company’s financial units, Reuters reported.
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But tumbling operating profits underscored a difficult third quarter at Hyundai, which suffered poor domestic sales, a month-long strike and a rising won currency during the period.
Analysts told Reuters that Hyundai, which is 10% owned by DaimlerChrysler, looks set for a better performance in the final quarter as it cranks up production to fill inventories depleted during the industrial action.
Reuters said Hyundai also sounded upbeat on domestic sales next year, saying that an expected revival in local demand and model launches should lift its local sales to around 1.5 million units from an estimated 1.3 million this year.
Reuters said Hyundai posted a net profit of 301.7 billion won ($US256 million) for the third quarter against a profit of $252 million a year ago while sales fell 19% to $4.3 billion.
The profit came in well above average analyst forecasts for a 17% fall to $212 million, although sales were below forecasts of $4.6 billion, the news agency noted.
Hyundai reportedly said in a stock exchange filing that earnings before interest and tax tumbled 40% to $213 million.
Reuters said that, on top of generally sluggish sales, a seven-week strike cost Hyundai $1.2 billion in lost output, while a 3.4% climb in the won currency against the dollar during the quarter decreased the value of its overseas revenues.
“Extraordinary profits from a better performance at financial affiliates and smaller tax payments resulted in higher net profit despite falling sales,” Hyundai Motor spokesman Jake Jang told Reuters.
The profit surprise was also due to better margins from sales of high-end models, another company official earlier told the news agency.
