For Korea Inc., third quarter was mixed bag

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For Korea Inc., third quarter was mixed bag

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Third-quarter performances of the nation’s major companies disclosed yesterday turned out to be a mixed bag.

The nation’s leading automaker, Hyundai Motor, had gloomy news as it announced its lowest quarterly operating profit in the last four years.

While the leading steelmaker, Posco, enjoyed a rise in operating profit and the world’s second-largest memory chip maker, SK Hynix, marked its highest quarterly performance ever.

Hyundai said it earned 1.64 trillion won ($1.55 billion) in operating profit in the third quarter, an 18 percent drop from last year’s 2.01 trillion won.

The company said total sales in the quarter were 21.2 trillion won, up by 2.2 percent from 20.8 trillion won, but operating profit dropped mainly due to unfavorable exchange rates that offset the gains in sales.

Hyundai’s lowest operating profit before this quarter was the fourth quarter of 2010, at 1.23 trillion won.

“Total sales increased as we introduced some new cars in the period, but because the average exchange rate dropped about 6 percent over a year, the profitability lowered,” the company said.

“The average exchange rate was the lowest since the second quarter of 2008, and a fewer number of factory operation days from July to September was another minus.”

Hyundai said it sold about 1.12 million cars, up 1.8 percent from 1.1 million last year, but the export volume in units for the quarter dropped by 6.8 percent while domestic sales volume only increased by 1.5 percent. The company added that total sales for the past nine months was 65.6 trillion won, selling about 3.62 million cars in the domestic and global markets, a 3.6 percent rise in units over a year earlier.

“We expect the numbers to improve in the next quarter since we will introduce some new cars in the global market,” a spokesman of Hyundai said.

Posco reported 16.2 trillion won in total sales and an operating profit of 878 billion won on a consolidated basis for the quarter, enjoying a 7.4 percent rise in sales and 38.8 percent rise in operating profit.

The company said the sales of expensive steels, including sheets for cars, increased in the quarter and that it also performed well in the energy business. The company said it expects to sell more than 8.17 million tons of sheets for cars by the end of the year, a 17 percent rise from last year.

“Our businesses overseas were also a plus as they have been stabilized lately,” Posco said. “The total sales for products manufactured in Indonesia increased by 24 percent over a year earlier.”

SK Hynix posted its highest quarterly performance ever backed by increased demand for semiconductors used in personal computers and smartphones.

Its revenue climbed 5.6 percent year-on-year and 9.9 percent quarter-on-quarter to 4.312 trillion won.

Operating profit jumped 11.8 percent from a year earlier and 20 percent compared to last quarter to hit 1.3 trillion won thanks to higher profitability of NAND flash and the cost competitiveness of products overall, according to the company.

It was an earnings surprise as SK Hynix’s operating profit surpassed the market estimate of 1.27 trillion won.

Its operating profit exceeded 1 trillion won for the third consecutive quarter and its operating profit margin reached 30 percent, while the net profit margin has become 25 percent.

By products, shipments of DRAM chips used in personal computers increased 7 percent compared to the same period last year, while the average sales price stayed the same as last quarter’s.

Shipments of NAND chips used in mobile devices also rose 26 percent and their average sales price fell 2 percent.


BY KWON SANG-SOO AND KIM JUNG-YOON [sakwon80@joongang.co.kr]

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