New Delhi: Hyundai Motor Co. received “negative equity income” of 24.9 billion won (Rs92.51 crore) from Hyundai Motor India Ltd, the South Korean auto maker said in its quarterly results released on Thursday.
Crunch time: A Hyundai Motor India Ltd unit in Tamil Nadu. Madhu Kapparath / Mint
This compares with 6.6 billion won it had received as equity income from its wholly owned subsidiary in India in the same period a year ago.
Equity income is money earned by a company on investments in subsidiaries.
A spokesperson of Hyundai Motor India declined to comment, saying only his South Korean counterpart will be able to speak on the matter. The company’s south Korea offices could not be contacted as they were closed for the day.
Hyundai reported a net profit of 225 billion won for the quarter ended 31 March, a 43% drop from the year earlier. The company beat analyst expectations even as sales dropped 26% to 6.03 trillion won.
“Demand in advanced markets is falling by two-digits and even demand in emerging markets is dampening,” the company was quoted as saying in a statement by Reuters news agency.
In the last few months, Hyundai Motor India has been battling a slowing Indian and export market. In February last year, the company doubled capacity at its Chennai plant to 600,000 units.
Profitability at the Indian unit has been eroding in the last three fiscal years. In the year ended 31 March, 2006, Hyundai India reported a profit of Rs525.1 crore, according to documents obtained from the Registrar of Companies. That figure declined to Rs466 crore the next fiscal. In the year ended March 2008, the company reported a profit of Rs135.7 crore.
Reuters contributed to this story