Analysts expect Hyundai’s star to rise in 2nd halfHyundai Motor is expected to fare worse in the first half of the year due to the Korean currency’s steep rise against the U.S. dollar and Japanese yen, analysts said yesterday.
Still, Korea’s top automaker is likely to see its profits improve in the second half with the release of new models and firm demand, they said.
On Thursday, Hyundai said its 2012 earnings reached a record high on robust sales in overseas markets. Net profit reached 9.06 trillion won last year, soaring 11.7 percent on-year.
But its fourth-quarter net profit dropped to 1.89 trillion won from the 2 trillion won a year earlier as the stronger won hurt sales.
“An increase in the average selling prices is not enough for Hyundai Motor to fully cover losses made from the won’s ascent,” said Jung Tae-oh, an analyst at Daeshin Securities. “Its operating profit will fall 16.2 percent in the first quarter of 2013.”
The outlook came as the won’s recent surge against the U.S. dollar sparked worries over exports. A stronger won usually makes Korean goods more expensive overseas.
“The new working shift system in Hyundai’s manufacturing facilities will also weigh down on its performances,” Jung added. Daeshin Securities adjusted the target stock price from 294,000 won ($275) to 270,000 won.
The management and labor union of the automaker agreed last year to reduce working hours by removing a night shift.