SEOUL, July 22 (Reuters) – South Korea’s Hyundai Motor Co (005380.KS) posted its best quarterly profit in about six years on Thursday, helped by strong demand for its high-margin sport utility vehicles (SUVs) and its Premium Genesis Cars.
Hyundai, which along with its subsidiary Kia Corp (000270.KS) is among the world’s 10 largest automakers by sales, reported net profit of 1.8 trillion won ($ 1.57 billion) for April -June versus 227 billion won in the same period a year earlier.
That compares to an average analyst forecast of 1.6 trillion won compiled by Refinitiv SmartEstimate.
“Sales of SUV models and Genesis luxury brand models boosted sales volume, and lower incentives helped increase revenue and profitability in the second quarter, recovery underway after the global COVID pandemic -19 having boosted auto demand, “Hyundai said in a statement. .
This good result was also supported by conservative management of Hyundai’s supply chain, which has helped it deal with a global chip shortage better than many other automakers, analysts said.
But the prolonged shortage and other component supply issues have started to catch up with Hyundai, notably disrupting its production of electric vehicles. Read more
In April, Hyundai suspended production at a plant making the electric Ioniq 5 crossover due to chip and component supply issues. Read more
On Thursday, he said he expects year-over-year sales growth to slow in the second half of 2021 due to difficult business conditions, including fluctuating commodity prices and unstable supplies of China. automotive chips.
The automaker also said it expects the global chip shortage to gradually become less acute in the second half of the year, adding that it continues to partner with major semiconductor companies to maintain supply conditions. stable.
“These supply issues are expected to improve in the second half of the year,” said analyst Lee Jae-il at Eugene Investment & Securities, noting an improvement in supply forecasts last week by leading producer Taiwan Semiconductor Manufacturing Co Ltd (2330.TW).
The Taiwanese chipmaker said the automotive chip shortage will gradually ease for its customers from the current quarter, but expects the overall semiconductor capacity crunch to eventually continue until next year. Read more
Hyundai and its subsidiaries are in talks with local chip companies to reduce their reliance on foreign supplies, Reuters reported last month. Read more
Shares of Hyundai Motor, Asia’s fifth-largest automaker by market value, rose 0.2% after the company reported its results, compared to a 1% gain in the broad market (.KS11).
($ 1 = 1,149.3500 won)
Reporting by Heekyong Yang and Joyce Lee; Editing by Himani Sarkar and Christopher Cushing
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