Hyundai unveils healthy results
Hyundai Motor Co, South Korea's top auto maker, yesterday reported quarterly operating profit more than doubled, beating expectations, helped by higher sales, aggressive cost reductions and a weaker won.
New models including the Genesis, its recently launched top-end sedan, and cost-saving efforts should continue to lift profit margin this year, especially in the higher-margin domestic market, of which Hyundai controls about half.
Despite a potential slowdown in the global economy and soaring raw material and oil prices, a weaker won currency is also expected to help Hyundai score price competitiveness gains against Japanese makers battling a stronger yen. New factories in China and India are likely to lift sales abroad.
"In order to obtain a fruitful outcome, we will put our focus on stepping up marketing capacity and exploring new markets," Hyundai said in a statement.
"We will achieve a 6.5 percent operating profit margin or above in 2008." The company had operating profit margin of 6 percent in 2007 and 4.5 percent the year before.
Analysts responded positively to the results, saying currency factors and the Genesis have brightened the outlook for the world's sixth-largest carmaker.
"Hyundai's outlook is extremely positive this year, as the won has fallen sharply against the Japanese yen, and the new premium sports sedan, the Genesis, has drawn hot reaction from consumers in the first month of its launch," said Chung Kyun-sik, chief investment officer of Estar Investment Advisors.
But Hyundai is not seen showing significant profit growth in the United States and China, the world's two biggest auto markets, and high prices of oil and raw materials are another concern, analysts said.
Hyundai, the world's No 6 auto maker along with affiliate Kia Motors Corp, posted a 636.5 billion won ($670.2 million) operating profit in the fourth quarter of 2007 ended on Dec 31, beating a 473.3 billion won profit forecast by 11 analysts polled by Reuters.
After the results, shares in Hyundai stood 2.5 percent higher at 70,700 won by 0529 GMT, mostly in line with the broader market.
Agencies
(China Daily 01/25/2008 page16)
