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(2nd LD) Hyundai Motor Q4 net drops 7.7 pct on currency losses, global competition

All News 15:22 January 26, 2016

(ATTN: ADDS more info from conference call and closing stock prices)

SEOUL, Jan. 26 (Yonhap) -- Hyundai Motor Co., South Korea's top automaker, said Tuesday that its fourth-quarter net profits fell 7.7 percent from a year earlier due in part to the won's ascent against other currencies and heated competition in global markets.

In a regulatory filing, the automaker reported a net profit of 1.53 trillion won (US$1.3 billion) for the October-December period, down from 1.66 trillion won a year earlier.

Operating income plunged 19.2 percent on-year to 1.51 trillion won over the same period, while sales grew 5.1 percent to 24.76 trillion won.

The fourth-quarter earnings are almost in line with the market consensus. Brokerages forecast a net profit of 1.59 trillion won, according to data compiled by Yonhap Infomax, the financial arm of Yonhap News.

For 2015, Hyundai Motor reported a net profit of 6.51 trillion won, down 14.9 percent from a year earlier. Its yearly operating profit also shrank 15.8 percent to 6.36 trillion won, the worst in about five years.

"The profitability slightly worsened in 2015 on intensifying competition in major global markets coupled with the sharp depreciation of emerging countries' currencies," the company said in a press release.

The company said that its operating profit ratio stood at 6.9 percent last year, down 1.5 percentage points from a year earlier. In the fourth quarter, the ratio came down to 6.1 percent from 8 percent in the same time of 2014.

Last year, Hyundai Motor sold around 4.96 million cars globally, almost the same level of sales tallied a year earlier, the company said.

Hyundai Motor painted a still gloomy picture of global market conditions this year, citing the slowing growth in China, historically low crude oil prices and financial instability in emerging markets as possible downside risks.

In particular, the currencies in emerging countries, such as Russia and Brazil, are expected to remain weak this year, a factor that it worries will drag on its sales and profitably in overseas markets.

"We will keep making hedging efforts by expanding the ratio of locally produced auto parts and the ratio of exports of vehicles being manufactured in local markets," Lee Won-hee, Hyundai Motor's chief financial officer, said during a conference call.

Against these tough and uncertain business situations lying ahead, Hyundai Motor said that it will focus on enhancing its future competitiveness and consolidate the sustainable growth base. To that end, the automaker vowed to expand research and development and secure its lead in the environment-friendly vehicles sector.

"By expanding the market for luxury and sport utility vehicle models, we intend to improve our product mix," the company said. "Also, with the won-dollar exchange rates improving favorably, we will make an all-out effort to raise the profitability."

Hyundai Motor aims to sell 5.01 million cars at home and abroad this year, which includes 693,000 units in the domestic market.

It also plans to pay a year-end dividend of 3,000 won, which is subject to approval by its shareholders. If the 1,000 won paid in the middle of last year is included, the total would mark the automaker's largest annual dividend payout.

Shares of Hyundai Motor closed down 1.09 percent at 136,000 won on the Seoul bourse. The result was released before the market closed.


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