Hyundai Motor suffered an earnings shock with its third-quarter operating profit in 2018 plummeting by 76 percent from the same period of last year. It surpassed market expectations, which had originally reached 800 billion won.
Hyundai Motor held a conference call for its management performance in the third quarter of 2018 at its headquarters in Yangjae-dong, Seoul on Oct. 25 and announced that its sales in the third quarter were 24.4 trillion won and operating profit came to 288.9 billion won.
Its operating profit decreased 76% from the same period of last year. Its ordinary profit reached 362.3 billion won and net profit was 306 billion won.
Global sales in the third quarter increased 0.3 percent from the same period last year to 937,660 units in the market excluding China, while the sales in the market including China came to 1.12 million units, off 0.5%.
During the Jan.-Sept. period, the company posted 3.36 million units in car sales, 71.5 trillion won in sales and 1.9 trillion won in operating profit.
Key reasons why operating profit has been greatly reduced are unexpected quality-related expenditures stemming from the recall of airbags and currency weakness in emerging countries.
"Despite various efforts to cut costs, temporary cost factors such as expanding marketing activities for the World Cup, recall of airbag controllers, and application of engine diagnostic new technology increased by 8.6 % from a year ago to 3.4 trillion won," a Hyundai Motor spokesman said.
"The won-dollar exchange rate has fallen and the currency value of major emerging economies such as Brazil and Russia has dropped by 10 to 20 percent compared to the same period last year, worsening profitability," he added.
Hyundai Motor posted poor performance in both the first and second quarters of this year. Its sales in the first quarter decreased by 4 percent from the same period last year to 22.46 trillion won, while operating profit plunged by 45.5 percent to 681.3 billion won.
