Hyundai Motor’s Q2 operating profit exceeds W4 tr for 1st time

Jul 27, 2023, 08:02 am

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Hyundai Motor Group headquarters in Seoul / Provided by Hyundai Motor Group

AsiaToday reporters Choi Won-young and Woo Sung-min

Hyundai Motor’s second-quarter operating profit exceeded 4 trillion won for the first time, breaking its own record for three consecutive quarters. Its Q2 operating profit ratio stood at 10 percent, rising to double digits for the first time in a decade. This is higher than Tesla with 9.6 percent, one of its biggest rivals. Analysts say that its profitability has improved significantly thanks to high value-added models.

Consequently, Hyundai Motor’s operating profit exceeded 7.8 trillion won in the first half of this year, making it certain to be the No. 1 listed company. Throughout the year, it is expected to surpass 10 trillion won in operating profit for the first time in history. While the semiconductor industry, which accounted for 25 percent of South Korea’s exports, is going through the tunnel of recession, automobile industry is firmly supporting the economy. Without geopolitical risks, Hyundai Motor is confident that it will continue to strengthen its leadership position in the second half of the year.

Hyundai Motor said Wednesday that its second-quarter operating profit rose to 4.2 trillion won, the highest ever. Its operating profit for the first half of the year stood at 7.8 trillion won in total.

“Operating profit increased year-on-year based on production improvement as chip and component supplies stabilized worldwide,” a Hyundai Motor official said. “The operating profit increase was helped by increased sales, enhanced product mix focused on high value-added models, and favorable exchange rates.”

“As the semiconductor supply shortage improved, production expanded and major market inventory levels are still low, so sales are expected to increase in the second half of the year,” the official said.

The firm said it will carry out its first-ever quarterly dividend of 1,500 won per common share starting from the second quarter. It plans to ease stock price volatility through quarterly dividends and continue to increase its attractiveness to long-term stock holdings.

Meanwhile, Kia is also expected to post an operating profit of around 3 trillion won in its second-quarter earnings, which will be announced on Thursday. The combined quarterly operating profit of Hyundai Motor and Kia is expected to exceed 7 trillion won for the first time in history. As a result, they are likely to overtake Toyota, the world’s No. 1 automaker based on sales volume, and rank second in operating profit after Volkswagen Group as of the first half of this year.

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