Hyundai’s profit during first quarter surpassed analysts’ estimations, due to record sales in China.
Hyundai’s net income dropped to 2.09 trillion won ($1.9 billion) from 2.45 trillion won during the same period last year, but profit surpassed the analysts’ estimation of 1.99 trillion won. The automaker’s sales in China increased 41%, helping offset the company’s losses, which struggles with the won’s gain of 25% against the yen and labor concession which affects production in its home market.
“Although concerns on the strong won and weak yen that hurt our cost competitiveness still remain, it will be something that we will be able to manage,” said Lee Won Hee, Hyundai’s chief financial officer. “We expect sales contribution from developing markets to increase as the new plants in China and Brazil enhance our productivity.”
Operating profit dropped 11% to 1.87 trillion won, higher than the analysts’ estimation of 1.85 trillion won. Hyundai expects sales this year to increase at the slowest pace last seen in 2007, with deliveries up 5.9% to 4.66 million vehicles. Combined sales from Hyundai and Kia are expected to increase 4.1% to 7.41 million vehicles, the lowest level over the past seven years.
Sales in the US increased almost 1%, as deliveries of the Sonata sedan dropped 14% and the Santa Fe SUV was down 34%. In Europe, Hyundai’s sales also dropped 11% on low demand for its i10compact and Tucson SUV.