Hyundai Motor’s Q2 OP up 50% on qtr on brisk sales of new cars, weaker KRW

South Korea’s top automaker Hyundai Motor Co. reported a 50.1 percent jump in operating profit for the second quarter versus the previous quarter on the back of favorable market conditions such as weaker local currency and brisk sales of lucrative Palisade sport utility vehicle.

Hyundai Motor said in a regulatory filing on Monday that its operating profit in the April-June period on a consolidated basis jumped 50.1 percent on quarter and 30.2 percent on year to 1.2 trillion won ($1.02 billion).

Net profit also gained 4.8 percent on quarter and 23.3 percent on year to 999.3 billion won in the April-June period while sales jumped 12.4 percent and 9.1 percent during the same period to 26.97 trillion won.

Shares of Hyundai Motor finished 1.12 percent lower at 133,000 won on Monday.

Strong earnings was backed by favorable market conditions such as weaker Korean won against other currencies and brisk sales of new vehicles including popular SUV Palisade. The automaker managed to raise over 1 trillion won in quarterly operating profit in the April-June period, the first time since 1.2 trillion won in the third quarter of 2017.

Hyundai Motor shipped out 1,104,916 vehicles in the second quarter, down 7.3 percent from the same period a year ago.

Domestic sales rose 8.1 percent to 200,156 units in the second quarter compared to last year, helped by brisk sales of SUVs Palisade and Kona as well as of its all-new Sonata sedan. Overseas sales, however, fell 10.1 percent to 904,760 units over the same period, mainly due to sluggish sales in major markets China and the United States.

Despite on-year decline in overseas sales, overall sales gained 9.1 percent on year to 26.97 trillion won thanks to favorable exchange rate environment, strong sales of both SUVs and new vehicles, and incentive cut in the U.S. market.

The rate of cost to selling price reached 82.9 percent in the second quarter, down 1.2 percentage points from the same period last year on a rise in sales of new vehicles and growing popularity of SUVs and newly released cars.

SUVs Palisade

Operating cost jumped 13.8 percent to 3.4 trillion won over the cited period as the automaker increased spending on new technology-related research funds to secure future growth engine.

Hyundai Motor’s profit ratio improved 0.8 percentage point on-year to 4.6 percent in the April-June period. Ordinary income also jumped 22.8 percent to 1.39 trillion won during the same period.

In the first six months of this year, Hyundai Motor raised 2.06 trillion won in operating income, up 26.4 percent against a year-ago period. Sales gained 8.1 percent to 50.95 trillion won and net profit 26.6 percent to 1.95 trillion won. Hyundai Motor sold 2,126,293 vehicles in the first six months of this year, down 5.1 percent from the same period a year ago.

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