SOUTH KOREA: Hyundai quarterly earnings seen down but outlook brighter - report

By just-auto.com editorial team | 10 November 2003

Hyundai Motor is expected to announce a 17% fall in quarterly earnings as slumping domestic demand, a softer dollar and the fallout from a month-long strike take their toll, Reuters reported on Friday, adding that analysts say the outlook for Hyundai looks brighter in the current quarter because it is to crank up production to fill inventories depleted during strikes.

Solid overseas demand should help provide a buffer to sluggish domestic sales, the analysts added, according to the news agency.

"The strike, the Korean thanksgiving holiday, and the summer vacation lowered the factory utilisation rate to 70% during the third quarter versus an average rate of 90%," Kim Sang-ik, an auto analyst at Daishin Economic Research, told Reuters.

"A weak local economy as well as unfavourable exchange rates also put a damper on the third-quarter results," Kim reportedly said.

Reuters said Hyundai is expected to earn a net profit of 247.3 billion won ($209.4 million) for the three months ended September 30, according to four analysts surveyed by Reuters, which compares with a profit of 296.2 billion won a year ago.

Sales fell 20% to 5.38 trillion won, the poll reportedly showed.

Reuters noted that Hyundai Motor is due to release results next Tuesday and said the gloomy forecasts stand in contrast to Japanese rivals which reported robust earnings this week.