South Korea’s Hyundai Motor reported its first rise in profit in five quarters, helped by improving sales at home and the United States.
In the quarter ended March, Hyundai posted a 24 per cent jump in net profit to 829bn Won ($720m), becoming its first year-on-year rise since 2017 and the only major Korean exporter so far to report higher earnings for the period.
This comes as Hyundai’s heir apparent Euisun Chung tightens his grip and reshuffles top management to revive stalled growth at the automaker – once hailed as a star performer during the global financial crisis about a decade ago.
That beat an average estimate of 758 billion profit from 15 analysts polled by Refinitiv.
Although, its outlook remains murky with Washington threatening tariffs on imported vehicles, Hyundai’s operating profit rose 21 percent to 825 billion won and revenue climbed 7 percent to 23.99 trillion won, as its South Korea sales hit a 17-year high and U.S. sales rose for the first time since 2016.
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Chief Financial Officer Hyundai, Choi Byung-chul said on an earnings call on Wednesday that the South Korean multinational automotive manufacturer will try to sustain its profit improvements driven by new models.
He added that Hyundai is aiming for an operating margin of more than 4 percent this year versus 2.5 percent last year.
He also said Hyundai had decided to suspend its oldest plant in China to better manage its massive overcapacity there and respond to Beijing’s efforts to tackle pollution.
“The Chinese market is not in a favorable condition.”
Hyundai’s first-quarter sales in China slumped 19 percent to the lowest since 2009, hit by the lack of attractive models and strong branding amid competition from local and global rivals.
Hyundai is now rolling out a full line-up of sport utility vehicles (SUVs) this year, after a consumer shift to the segment took a toll on its sedan-heavy line-up.
Yetunde Adegoke
