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(LEAD) Hyundai Motor Q2 net shrinks 1.5 pct on weak global demand

All News 14:54 July 26, 2016

(ATTN: UPDATES with additional information in last 3 paras)

SEOUL, July 26 (Yonhap) -- South Korea's leading automaker Hyundai Motor Co. on Tuesday said its net income dropped slightly from a year earlier in the second quarter on a dip in exports and profitability.

Net profit came to 1.76 trillion won (US$1.55 billion) in the April-June period, down 1.5 percent from the same period last year, the company said in a regulatory filing.

Sales surged 8.1 percent on-year to 24.68 trillion won, with operating profit gaining 0.6 percent to 1.76 trillion won.

The on-year drop in net income was partly attributed to weak demand in overseas markets.

In the three months ended June 30, the South Korean carmaker exported 271,979 cars, down 14.4 percent from the same period last year.

The drop was in turn attributed to a steady increase in the company's overseas production.

Still, the large drop in exports more than offset a 12.2 percent spike in overseas sales of Hyundai cars produced overseas.

In the first six months of the year, the company's overseas sales slipped 1.8 percent on-year to a little over 2.04 million cars, while its domestic sales advanced 4.4 percent to some 350,000 vehicles.

"The company's overall performance has somewhat slowed from a year earlier in the first half, partly due to weak demand in some newly emerging markets. Still, the second-quarter performance showed improvements from the previous quarter," a company official told reporters.

In the first six months of the year, the company's net profit slipped 6.4 percent on-year to 3.53 trillion won, despite a 7.5 percent increase in overall sales totaling 47.02 trillion won over the cited period, the company said in a press release.

Operating profit also dropped 7 percent on-year to about 3.1 trillion won in the first half.

"Hyundai Motor expects its global business conditions to further deteriorate in the second half due to growing uncertainties stemming from the Brexit vote and a prolonged slump in the global economy," the automaker said in a press release. "The company will reexamine its system so it can timely provide products that meet its consumers' demands while also actively responding to changes in the global automobile market to overcome such difficulties."


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