Seoul: A rise of 2% in operating profit recorded for this year's Q1 was caused by beneficial currency conditions and by buying behavior before the tariff anticipation in the US.
The making of the South Korean automaker, in publicizing an operating profit of 3.6 trillion won ($2.52 billion) between January and March, was, however, slightly higher than last year's figure of 3.56 trillion won. As for results, they were closely aligned with a SmartEstimate of 3.5 trillion won by LSEG compiled from 17 other market analysts.
On the positive side, the gain reflects Hyundai's resilience against worsening headwinds of greater difficult global economies. A weaker Korean won played for the automaker in producing values from overseas earnings. Also buoying Q1 figures were anticipatory vehicle purchases made by US consumers, which was triggered by the developing speculation that there may be import tariffs imposed on US imports.
Heavily hit at this time are Hyundai and its affiliate, Kia, as they are the third largest in the world in terms of automotive sales. They had gained significantly in market share of the US during the pandemic but have left themselves hanging with high exposure in this market, where almost a third of the total global sales of the brand come from.
Nevertheless, Hyundai's better earnings results saw its shares falling by 0.4%, consistent with overall South Korean shares which fell by 0.2%.
Hyundai has hedged again trade, especially the new agreement with Posco regarding cooperation with its steel plant in the US, strengthening local partnerships, and diversifying its electric vehicle lines, expectations being that there will be a lot of competition here in the future, as regulations and consumer preferences change.
[Source Credit: Business Recorder]
