SEOUL: Hyundai Motor Co. said on Thursday its second-quarter net profit plunged 23.8 percent from a year earlier, due to a strong won and increased competition at home and abroad.
The largest South Korean automaker’s net profit came to 1.79 trillion won ($1.55 billion) during the April-June period, down from 2.35 trillion won a year earlier, the company said in a regulatory filing.
“Despite the strong dollar, the [South Korean] won gained strength by a great margin against other currencies”, the company said in a statement.
“Mounting competition among automakers also contributed to the fall in earnings”.
Operating profit was also down 16.1 percent on-year to 1.75 trillion won, sales inched up 0.3 percent to 22.82 trillion won.
Sales in China and the United States fell as the won’s strength over a weakened Japanese yen undercut Hyundai’s competitiveness against rivals like Toyota Motor Corp.
“With unfavorable economic situations, such as a stronger won, poised to continue, it seems unlikely that Hyundai’s sales will drastically improve anytime soon,” Lee Sang Hun, an analyst at IBK Securities Co., told Bloomberg before the earnings announcement.
The company announced its first-ever interim dividend earlier Thursday—a move aimed at appeasing shareholders still upset by the company’s purchase last year, for $10 billion, of a
plot of land in downtown Seoul for its new headquarters.
Hyundai will pay 1,000 won per share, or a total of 268.7 billion won, as an interim dividend, it said in a filing.
Its shares were trading at 138,000 won, up 5.3 percent on Thursday.