Hyundai Motor, together with affiliate Kia Motors the world’s fifth largest automaker, has just come up with a quarterly profit that succumbed below analyst expectations, much to the dismay of already disgruntled investors.
The company saw the fourth quarter’s profit dropping 19% from the same period of 2013 to 1.66 trillion won ($1.53 billion) in 2014 and the investors are likely to become even more unsettled following last year’s decision of the group to purchase a $10 billion property in Seoul. The group’s net profit was negatively impacted by the currency plunge of the Russian rouble – which added to the stress of already having slowing economy and plunging auto sales. Additionally, as competition on the US market – Hyundai’s second largest – intensified because of cheaper Japanese imports, the automaker had to increase the purchase incentives offered to customers. Now, president Lee Won-hee added that further currency risks are expected to arise from Russia and other emerging markets during the year.
To appease investor worries, the carmaker also announced that it would lift its year-end dividend by more than 50 percent for the financial tally of last year – paying a dividend at the end of 2014 of 3,000 won (2 pounds) for each common share held by investors, soaring from 1,950 won at the end of 2013. The company’s chief financial officer added that Hyundai is committed to continuously increasing its dividend quota.