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(2nd LD) Hyundai swings to black in Q4 on improved product mix, weak won

All News 16:01 January 22, 2020

(ATTN: ADDS 2nd photo and details in paras 5-14)
By Choi Kyong-ae

SEOUL, Jan. 22 (Yonhap) -- South Korea's Hyundai Motor Co. said Wednesday it swung to the black in the fourth quarter, helped by an improved product mix and a weak won.

For the October-December quarter, Hyundai Motor posted a net profit of 851.2 billion won (US$730 million), shifting from a net loss of 203.3 billion won a year earlier, the company said in a statement.

Operating profit more than doubled to 1.24 trillion won in the fourth quarter from 501.1 billion won a year earlier. Sales rose 11 percent to 27.87 trillion won from 25.23 trillion won during the same period.

For the whole of 2019, net profit nearly doubled to 3.26 trillion won from 1.65 trillion won the year before. Operating profit jumped 52 percent to 3.68 trillion won from 2.42 trillion won, while sales were up 9.3 percent to 105.79 trillion won from 96.81 trillion won.

"The addition of new models such as the Palisade sport utility vehicle and the face-lifted Grandeur sedan to the lineup resulted in an improved product mix. Robust sales of the models boosted the bottom line," Senior Vice President Koo Za-yong, head of Hyundai's Investor Relations division, said on a conference call with analysts after the release of the earnings results.

This undated file photo shows Hyundai Motor's headquarters building in Yangjae, southern Seoul. (Yonhap)

On top of an improved product mix, decreased incentives delivered to overseas dealerships and friendly exchange rates also helped shore up the quarterly results, the executive said.

The dollar rose to an average of 1,175.81 won in the fourth quarter from 1,127.52 won a year earlier, according to the Bank of Korea. A weak won makes South Korean exports more price-competitive in overseas markets and lifts the value of repatriated profits.

On Wednesday, shares in Hyundai Motor jumped 8.6 percent to 127,000 won, far outperforming the broader KOSPI's 1.23 percent advance. Its affiliate Kia Motors Corp. advanced 2.4 percent to end at 42,600 won.

Looking ahead, Hyundai Motor said it will continue to focus on improving profitability to achieve an operating profit margin of 5 percent this year, higher than the 3.5 percent it posted last year.

To achieve this goal amid an economic slowdown, Hyundai Motor also said it will further strengthen its lineup with new SUV models such as the Tucson and the GV70. The GV70 will be launched under its independent Genesis brand later this year.

In 2020, the maker of the Sonata sedan and the Santa Fe SUV aims to sell a total of 4.58 million vehicles in global markets. The target is 3.5 percent higher than the 4.42 million units it sold last year.

It said it expects strong demand for the Palisade in the U.S. will continue to help boost its overall sales, with new models such as the all-new Avante compact, the all-new Tucson SUV and the GV80 SUV set to be launched in the world's most important automobile market this year.

The company plans to strengthen its independent Genesis lineup by increasing the number of models to six by 2021 from the current four. On top of the current G70, G80 and G90 sedans and the GV80 SUV launched in Korea last week, it will add the GV70 later this year and an all-electric model next year.

"This year, Hyundai is aiming to sell 116,000 Genesis models in global markets, while contemplating the timeframe for entering the European and Chinese markets with Genesis models," Executive Vice President Lee Yong-woo, head of the Genesis division, said.

In 2019, 83,275 units of the three Genesis sedans were sold in dozens of countries, including the United States, Canada and Russia, as well as in the Middle East.

As for lackluster sales in China, Hyundai said it will keep local inventories at manageable levels. It aims to revive sales in the world's biggest automobile market in the second half by launching competitive localized models.

This photo provided by Hyundai Motor shows the Palisade SUV. (PHOTO NOT FOR SALE)(Yonhap)


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