Hyundai reports record quarterly earnings

Hyundai Motor, the country’s largest carmaker, reported a fivefold increase in profits to a record 1.13 trillion won ($1 billion) for the January-March period from 225 billion won a year ago as sales rose for new car models.

Sales increased by 40 percent to 8.42 trillion won from a year ago as Hyundai reported the second consecutive quarter of record profits.

“A stronger won was expected to dampen the profits, but it seems like it was not a big deal,” said Michael Sohn, an analyst with Woori Investment and Securities. The won rose 19 percent against the dollar and 15 percent against the euro in the three-month period.

“The popularity of its new models and higher profit margins for them more than offset the currency effect,” Sohn said.

The number of cars sold in the quarter rose by 37 percent to 842,037, boosted by the introduction of revamped models of the Sonata sedan and Tucson sport-utility vehicle in Korea and rapid demand growth in emerging markets in Latin America and the Asia-Pacific region.

“Even amid the uncertain business atmosphere, we have laid the groundwork to emerge as a world-class company by expanding global market share in the U.S. and Europe and improving brand value by the steady improvement in quality,” said Lee Won-hee, Hyundai Motor’s chief financial officer.

Overseas plants now account for 53 percent of total sales, Lee said, while Hyundai’s total global market share rose by 0.1 percentage point to 4.8 percent.

Suh Sung-moon, an analyst at Korea Investment and Securities, said the company will continue its solid performance for the rest of the year. “Its inventory is low and the company is expected to run the production facilities at full capacity,” he said.

But Lee Myung-hoon at E-Trade Securities, said Hyundai could be hurt by rising material costs.

By Moon Gwang-lip [joe@joongang.co.kr]