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Hyundai Q2 profit hits record on US, China demand

Hyundai Q2 profit hits record on US, China demand
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First Published: Thu, Jul 29 2010. 10 33 AM IST
Updated: Thu, Jul 29 2010. 10 33 AM IST
Seoul: Hyundai Motor Co, South Korea’s top automaker, said on Thursday its quarterly net profit rose 71% to a record high, beating estimates on healthy demand in the United States and China.
Hyundai, which with its affiliate Kia Motors Corp is the world’s No.5 car maker, may face a tougher road ahead in the second half on worries over the strength of the US and European economies as well as rising raw material costs.
But new models, such as a revamped version of its best selling Elantra compact, will help it recapture domestic customers from its competitors, analysts said.
“We aim to reduce costs and increase market share with new product launches in the second half to fight uncertainties stemming from the potential global economic slowdown,” Hyundai said in a statement.
China, which surpassed the United States to become the world’s top auto market last year, could see an easing economy due to expected monetary tightening later in this year.
In the second quarter, Hyundai’s volume sales to China rose 17.4% from a year earlier, while domestic volume sales fell 17.5% during the same period, the company said.
Hyundai’s US volume sales during the April-June jumped 32.6% from a year earlier and its market share rose to a record 5.2% in June, despite sharply reduced incentives given to customers in the country.
By 10:37am, shares of Hyundai Motor rose 0.34%, outperforming than the main KOSPI index’s 0.08% drop.
Hyundai reported a record net profit of won 1.39 trillion ($1.17 billion) in the second quarter, compared with a consensus estimate of 1.1 trillion won by 23 analysts on Thomson Reuters I/B/E/S.
That compared with a 811.9 billion won profit a year earlier and the previous record of 1.13 trillion won in the first quarter of 2010.
Quarterly operating profit stood at won863.3 billion, above a forecast of won801.3 billion profit.
Since the beginning of the year, shares of Hyundai have risen about 20% versus a 5% gain in the wider market.
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First Published: Thu, Jul 29 2010. 10 33 AM IST
More Topics: Corporate Results | Hyundai | Automaker | Kia | Korea |