Hyundai Motor reports jump in net profit, record high revenue in 2022

Industry

Published: 26 Jan. 2023, 17:44

Hyundai Motor reports jump in net profit, record high revenue in 2022

Hyundai Motor Group Executive Chair Euisun Chung speaks during a meeting with his employees on Jan. 3 at its research center in Namyang, Gyeonggi. [YONHAP]

Hyundai Motor’s net profit jumped 40.2 percent in 2022, contributed to by vigorous sales of high-margin SUV models and a weak local currency.

Its annual revenue and operating profit recorded all-time highs.

Net profit stood at 7.98 trillion won ($6.45 billion) last year, up 40.2 percent on year but falling short of the market consensus of 8.87 trillion won compiled by FnGuide.

Annual revenue came in at 142.5 trillion won, a 21.2 percent year-on-year increase, in line with market expectations.

Operating profit jumped 47 percent to 9.8 trillion won, beating the analyst estimate of 9.5 trillion won.

“Robust sales of the top-of-the-line Genesis vehicles and SUVs, as well as electric vehicles [EVs], helped boost the bottom line,” said Seo Gang-hyun, executive vice president of finance and accounting, in an online conference call Thursday.

Hyundai Motor sold 3.9 million vehicles last year, and, of them, 51.5 percent were SUVs. In 2021, SUVs made up 47.3 percent of its total sales.

Vehicles from Genesis, Hyundai's premium brand, accounted for 5.3 percent.

Sales of eco-friendly vehicles, including hybrids, rose 19.7 percent to 505,000.

Its fourth-quarter net profit skyrocketed 143.8 percent to 1.7 trillion won. Revenue rose 24.2 percent to 38.5 trillion won, while operating profit soared 119.6 percent to 3.4 trillion won.

Domestic sales rose 3.3 percent in the fourth quarter due in part to the newest Grandeur sedan and Genesis vehicles. Overseas sales improved by 9.3 percent driven by the latest Ioniq 6 EV.

“Production is on the rise as the semiconductor shortage issue is getting better,” Seo explained.

Hyundai Motor hopes to sell some 4.32 million cars globally this year. Of them, the aim is that 330,000 will be pure EVs, up 54 percent from last year.

“Though economic uncertainties still remain, we will work to maintain our profitability by expanding sales of EVs like Ioniq 6 and Kona, and high-margin SUVs such as the fully revamped Santa Fe,” said Koo Za-yong, head of investor relations at Hyundai Motor.

When asked about its countermeasures to the U.S. Inflation Reduction Act (IRA), Seo said Hyundai will expand its lease programs for EVs.

“Now, only 5 percent of EVs are sold in lease programs in the United States,” Seo added. “We would like to increase that to more than 30 percent.”

In late December, the U.S. Treasury Department released “additional information” on clean vehicle provisions under the IRA, which specifies that buyers of commercial clean vehicles acquired for use or leased by taxpayers and not for resale will be eligible to apply for the $7,500 tax credit.

The Korean automaker also announced that it will invest 10.5 trillion won this year toward strengthening its EV business.

Some 4.2 trillion will go into research and development for next-generation technologies, while 5.6 trillion won will go toward new infrastructure such as its Georgia plant.

Hyundai’s Georgia plant will start mass production in 2025.

Kia will announce its 2022 earnings on Friday.

BY SARAH CHEA [chea.sarah@joongang.co.kr]