SEOUL: Hyundai Motor, South Korea’s biggest automaker, saw operating profit half in the second quarter owing to an economic fallout from the COVID-19 outbreak across the world, the company said Thursday.
Consolidated operating profit reached 590.3 billion won (493.1 million U.S. dollars) in the April-June quarter, down 52.3 percent from a year earlier. Revenue dipped 18.9 percent over the year to 21.86 trillion won (18.3 billion U.S. dollars) in the second quarter, and net income tumbled 62.2 percent to 377.3 billion won (315.2 million U.S. dollars).
The double-digit falls came as the COVID-19 pandemic caused shutdowns in major economies and the production disruption, resulting in a steep weakness of the global car demand. However, the second-quarter operating profit more than doubled the market expectations of about 270 billion won (225.5 million U.S. dollars).
The better-than-expected profit was ascribable to the domestic currency’s depreciation versus the dollar, a temporary tax cut here for vehicle purchase and the brisk demand for new models such as GV80 and G80.
Hyundai’s global automotive sale dropped 36.3 percent over the year to 703,976 units in the second quarter. The car sale in the domestic market advanced 12.7 percent to 225,552 vehicles, while the sale in overseas markets plunged 47.8 percent to 478,424 units.
The won/dollar exchange rate advanced to 1,221 won per dollar in the second quarter from 1,166 won a year earlier, Hyundai noted. The automaker forecast that negative factors would be improved after bottoming out in the second quarter though it worried about lingering uncertainty over the second wave of the COVID-19 pandemic.
It noted that it would take significant time for the global auto demand to recover to a level seen in the past owing to an economic slump both in advanced and emerging economies.
Meanwhile, Hyundai’s revenue fell 7.4 percent over the year to 47.18 trillion won (39.4 billion U.S. dollars) in the first half, and operating profit retreated 29.5 percent to 1.45 trillion won (1.2 billion U.S. dollars). The number of cars sold in the global market was 1,607,347 in the January-June period, down 24.4 percent compared with a year earlier.
The Law Today Pakistan, commonly known as TLTP, is the largest news wire service, headquartered in Islamabad. The service is providing fast, comprehensive and verified news on superior courts adjudications, regulatory framework of fiscal, monitory and external sectors, economic regulatory bodies amid apex institutions regulating the financial system. TLTP is empowering readers of more than 12 national English dailies in the country.