BloombergHyundai shares fell as much as 3.3% and are on track to close their lowest in more than two years.
Hyundai Motor Co said it will focus on luxury models, SUVs and electric vehicles to achieve record-high earnings expectations this year, even as challenges such as inflation and volatility in raw material prices persist.
Hyundai Motor Co said it will focus on luxury models, SUVs and electric vehicles to achieve record-high earnings expectations this year, even as challenges such as inflation and volatility in raw material prices persist.
While supply-chain disruptions continue to provoke uncertainty, and currency volatility and high marketing costs will be a burden in the face of tough competition, global chip shortages should ease in the fourth quarter, Hyundai said on Monday as it reported quarterly results. Analysts who announced missed ' estimates.
Operating profit for the three months through September was 1.55 trillion won ($1.07 billion), the South Korean automaker said, down from the average estimate of 2.7 trillion won by analysts tracked by Bloomberg. Sales rose 31% from a year ago to 37.7 trillion wins, beating estimates of 35.3 trillion wins.
Hyundai shares have fallen as much as 3.3% and are on track for their lowest level in more than two years.
Hyundai slashed its 2022 sales target from 4.32 million to 4.01 million vehicles, and slashed its planned investment for the year from 9.2 trillion won to 8.9 trillion won.
The company said it will "focus on sales recovery" through a plan that will "enlarge its product mix with SUVs and luxury models." Hyundai said its Grandeur EV named Azera is in high demand in markets outside Korea after its launch this month and will help boost domestic sales momentum. The Ioniq 6, which was introduced in Korea in the third quarter, is also selling well.
provision hit
Hyundai's third-quarter operating profit was down 3.4% from a year earlier, while net income declined 5.1%. Excluding provisions, operating profit was 2.9 trillion won, the company said.
"By adding provisions to operating profit, you will find that Hyundai is doing very well," said Koh Tae-bong, head of research at HI Investment and Securities in Seoul.
Hyundai and its affiliate Kia Corp said last week that they would make a combined booking of 2.9 trillion won as provision in third quarter earnings due to theta engine-related costs. Automakers said that more owners than expected sought replacement engines to buy new cars rather than buy new ones, which increased warranty costs.
Nomura analyst Angela Hong wrote in an October 20 note that the issue could hurt the companies' share prices in the near future. Kia shares fell as much as 3.8% on Monday, making their losses this year 20%. Hyundai is down about 22 per cent this year.
EV sales
Hyundai said its EV sales grew more than 27% from a year ago to about 52,000 units, accounting for 5.1% of total sales volume. Despite provisions and challenges such as inflation and geopolitical uncertainty, Hyundai expects record-high results this year, it said.
Battery giants, Hyundai worried about US moves on China supplies
The automaker raised its EV sales target for 2023 by 40% to about 300,000 units, with the Ioniq 6 accounting for about 20% of those sales the following year. Hyundai also said that it is looking at making a joint venture investment to manufacture batteries in the US.
No comments:
Post a Comment