The South Korean carmaker did achieve a profit during the first quarter, but it dropped over the same period in 2013 and also missed the analysts estimates.
The main factor for the setback is the nation’s currency – as Hyundai relies heavily on exports – and the won currency was in the past year the fastest appreciating among Asia’s currencies. The nation’s largest automaker reported in a statement its Q1 net income went down 0.9 % to 1.93 trillion won ($1.9 billion) from 1.95 trillion won in Q1 2013. That’s below the median estimate of 16 analysts – which forecasted 2.12 trillion won.
“The company’s profits should improve from the second quarter onward, helped by sales of the new Genesis and Sonata models in the U.S.,” said Lee Won Hee, the company’s chief financial officer. “Still, the won is expected to continue strengthening against the dollar.”
The operating profit also missed the estimates – of 2.04 trillion won on average – rising 3.7 % to 1.94 trillion won. After the reported results, the company’s shares went down 1.2 % to 242,000 won in Seoul trading.
While Hyundai is facing mounting pressure in its overseas markets from the other global automakers, especially Toyota and Volkswagen (which battle for the top position in 2014), the revitalization of sales in its home market and a hit Genesis model, which was introduced last November, aided the company in balancing the rising currency.