Hyundai Motor posts record quarterly profit in Q1

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

Hyundai Motor reported an all-time quarterly high of 3.42 trillion won ($2.6 billion) in net profit in the first quarter, driven by increased sales of high-margin vehicles and a weak Korean won.

On year, net jumped 92.4 percent and beat the market consensus of 2.6 trillion won compiled by FnGuide.

Operating profit soared 86.3 percent to 3.6 trillion won, also an all-time quarterly high and overshooting analyst expectations of 2.9 trillion won. It's the most profitable performance in any listed company in Korea in the first quarter so far.

Revenues rose 24.7 percent to 37.8 trillion, a record high for any first-quarter performance and also surpassing the consensus.

“Robust sales of the top-of-the-line Genesis vehicles and SUVs, as well as electric vehicles, helped boost the bottom line,” Seo Gang-hyun, the company's executive vice president of finance and accounting, said in a conference call Tuesday.

"Increased production also helped, as global shortages of automobile semiconductors improved."

Hyundai sold a total of 1.02 million vehicles in global markets in the first quarter, up 13.2 percent on year.

A total of 191,047 vehicles were sold in the domestic market, up 25.6 percent on year, with the latest Grandeur sedan the leading performer.

Overseas sales were largely driven by sales in the U.S., where 220,000 vehicles were sold, up 30 percent on year. Sales of SUVs rose 28 percent while sales of Genesis vehicles jumped 36 percent.

When asked about its countermeasures for the Inflation Reduction Act (IRA), Seo said the impact won't be as big as feared. Hyundai's electric vehicles are not eligible for a tax credit of up to $7,500 as they are not assembled in the North American region.

While Hyundai's EV models didn't make the list of EVs eligible for the Inflation Reduction Act (IRA) tax credit of up to $7,500, the impact of the inflation bill won't be as big as feared, Seo said.

"We expect that Hyundai vehicles will be able to receive credits starting in 2026," Seo said. "But we are currently expanding our lease programs and a large portion of vehicles sold in the U.S. market are internal combustion engine cars."

Leased EVs also qualify for the IRA tax credit, even if they were not assembled in North America.

Through last year, commercially leased cars accounted for just 5 percent of Hyundai's electric vehicles sold in the U.S. market. The company raised that to 35 percent as of the end of March.

Hyundai Motor shares closed at 201,000 won Tuesday, up 4.74 percent.

Kia plans to announce its first quarter earning report Wednesday.

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