Hyundai reported a profit drop higher than analysts’ estimations, as the won appreciated more than any other major currency, bringing down the value of overseas sales.
Net income during the fourth-quarter fell 5.5% to 1.89 trillion won ($1.8 billion), from 2 trillion won in 2012. Seven analysts surveyed by Bloomberg estimated that the net income will reach 1.98 trillion won. According to forecasts the yen, which began falling since late 2012, will continue to fall and the won will keep appreciating in 2013.
“The won will most likely continue strengthening this year, and if this trend continues, it will have a notable impact on the company,” said Heo Pil Seok, chief executive officer of Seoul-based Midas International Asset Management Ltd. “The company needs to show significant sales growth for the shares to move favorably, but that seems difficult this year.”
According to analysts the yen is expected to end 2013 at 90 per dollar, the lowest finish to a year since 2009, while the yen is predicted to increase more than 3% to 1,030 per dollar, the highest gain among Asian counterparts. Hyundai Chief Financial Officer Lee Won Hee said that the weak yen will help Japanese automakers boost exports especially in markets were the automaker is intensely competing against them