SEOUL, July 23 (AJP) — Hyundai Motor, South Korea's largest automaker, suffered 20-percent dip in second-quarter operating profit even as quarterly revenue hit a record high, as weaker sales volume, higher costs, and an unfavorable product mix outweighed favorable currency effects.
Operating profit for the April-June period came in at 2.851 trillion won, down 20.8 percent from a year earlier and slightly below market consensus, though up 13.4 percent from the first quarter. The operating margin narrowed to 5.8 percent from 7.5 percent a year earlier but improved from 5.5 percent in the first quarter.
The year-on-year decline was driven mainly by weaker sales volume, which cut operating profit by 542 billion won, and the combined effect of product mix and incentives, which reduced it by a further 570 billion won.
Favorable currency effects partially offset the pressure, adding 238 billion won, while the financial services division contributed an additional 106 billion won. The U.S. dollar rose around 3 percent against a year-ago period to average around 1,500 won in the second quarter.
Revenue totaled 49.215 trillion won, a record for a single quarter, up 1.9 percent from a year earlier and 7.1 percent from the previous quarter. Currency effects added 2.571 trillion won to revenue, while lower sales volume and an unfavorable mix subtracted 2.246 trillion won and 1.101 trillion won, respectively.
Net income fell 11.1 percent from a year earlier to 2.888 trillion won, though it rose 11.7 percent from the first quarter. Profit before tax declined 16.9 percent on-year to 3.646 trillion won.
Global wholesale shipments fell 6.9 percent from a year earlier to 992,000 vehicles, while retail sales dropped 4.2 percent to 999,000 units, as steep declines in China weighed on an otherwise mixed regional performance.
In the United States, Hyundai's largest market, wholesale shipments rose 0.9 percent to 265,000 vehicles even as industry-wide demand was nearly flat. Its market share increased 0.2 percentage point from a year earlier, remaining above 6 percent for a fifth consecutive quarter.
European wholesale volume fell 10.9 percent to 144,000 vehicles amid intensifying competition, geopolitical risks and major model launches scheduled for the second half, including the Tucson and Ioniq 3. Domestic wholesale sales dropped 16.4 percent to 158,000 vehicles amid a parts-supply disruption. Sales in China tumbled 36.9 percent to 19,000 vehicles, while wholesale volume in India rose 5.4 percent to 139,000 vehicles.
Hybrid vehicles accounted for a record 18.9 percent of Hyundai's global wholesale volume during the quarter, with the hybrid share of U.S. sales reaching an all-time high of 26.2 percent.
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