Hyundai Motor Company reported a 21% decline in second-quarter operating profit on Thursday, missing analyst expectations as weaker global vehicle sales, production disruptions, and rising costs offset record-breaking revenue. The South Korean automaker posted operating profit of 2.9 trillion won ($1.98 billion) for the April-June period, down from 3.6 trillion won a year earlier.
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Revenue rose 2% year-over-year to 49.2 trillion won, marking the highest quarterly figure in the company’s history, buoyed by increased hybrid vehicle sales and a favorable exchange rate from a weaker won. Net profit declined 11.2% to 2.88 trillion won, though this figure beat market expectations of 2.59 trillion won according to a Yonhap Infomax survey.
The earnings miss was attributed to several factors, including a fire at a key parts supplier in March that disrupted domestic production, rising raw material costs, and weakening global automotive demand. Global retail sales fell 6.9% during the quarter, with domestic sales dropping 16.4% and European sales declining 9.8% amid intensifying competition from Chinese automakers and U.S. policy uncertainty . Operating margin for the quarter stood at 5.8%.
A Hyundai Motor official acknowledged that “the global automotive industry is facing unprecedented challenges,” adding that the company will focus on new model launches in the second half to achieve its annual guidance. Despite the disappointing results, Hyundai Motor shares rose 2% following the announcement.
