Hyundai Motor CO announced its biggest yet dividend to calm down shareholders who were disturbed by the $10 billion property buy.
The payout though did not manage to distract investors from gloomy growth prospects due to declines in the value of the rouble and the yen.
The Korean automaker, which is the world’s fifth biggest when taken together with Kia Motors Corp, came to a more than two-week low after that announcement. Hyundai registered a 19% decline in profit over the last three months of 2014.
Hyundai-Kia went for investing in a new headquarters last year as the economy in Russia was detrimental to their earnings in a country where the pair was second best. At the same time, in the U.S., which is the pair’s number two market, a weak yen made the rival Japanese cars cheaper.
Hyundai’s President, Lee Won-hee, stated after the release of the carmaker’s earnings, that the currency risks are likely to keep on going in Russia, as well as in other markets that are emerging this year. Lee added that in the U.S., where a weak yen has set Japanese car makers make massive discounts for their car sales, Hyundai’s average sales will stay at an even level compared to 2014, with sales of new models like the Sonata sedan and the Tucson sport utility vehicle.
Hyundai is set to lift its sales by 1.8% this year, to 5.05 million vehicles sold, but Lee added that this target is expected to be exceeded.
According to Reuters data, on Wednesday, Hyundai shares went registered a 25% decline over the past year with the property buy leading to a selloff. This made Hyundai the worst competitor among the major carmakers, and also the cheapest.
By Gabriela Florea