Hyundai Motor Company reported 3.58 trillion won ($2.5 billion) in third-quarter operating profit Thursday, down 6.5 percent from the same quarter last year and missing the market consensus of 3.9 trillion won.
The automaker explained in a conference call that a proactive warranty extension for the North American Grand Santa Fe, a sport utility vehicle, caused a provision of about 320 billion won and affected the lower-than-expected operating profit for the July to Sept. period.
Despite the dip in operating profit, the automaker logged 42.93 trillion won in revenue, a record high for the third quarter.
It sold 1.1 million vehicles worldwide in the third quarter, a 3.2 percent decrease compared to the same period last year. Hyundai Motor cited a slowdown in growth in global markets such as Europe and China as well as the expansion of geopolitical risks, which led to a decline in demand across the world.
However, the company’s North American sales posted 300,319 units, up 9.3 percent on-year, based on the popularity of the new Santa Fe and the face-lifted Tucson.
Hyundai Motor said it expected to continue facing unfavorable business circumstances due to slowing growth rates in key markets, exchange rate drops, interest rate cuts and an increase in geopolitical risks including those in the Middle East and Ukraine.
The automaker underlined that it is focused on securing competitive advantages by enhancing risk management capabilities, ensuring quality, improving costs, optimizing sales efficiency, expanding global capabilities, fostering internal innovation and strengthening communication with stakeholders.
The company will further advance its existing quality completion systems — High-tech Integrated Vehicle Inspection System and High-tech Integrated Powertrain Inspection System — to develop future quality competitiveness in accordance with the software-defined vehicle development.
In the electric vehicle sector, Hyundai Motor said it would work to improve the cost of key components while enhancing price competitiveness by offering various battery types.
Having sold 201,849 hybrid cars and EVs across the globe, up 19.5 percent from the third quarter last year, the automaker noted that it plans to maintain sales volumes of hybrid vehicles, which are experiencing a surge in global demand, while sequentially launching next-generation models to create new sales growth momentum.
Hyundai Motor also underlined that it aims to continuously strengthen its global capabilities and actively explore new opportunities in future sectors such as hydrogen and autonomous driving through collaborations with General Motors and Waymo.
Following the first and second quarters this year, the company decided to keep its third-quarter dividend at 2,000 won per share, up about 33.3 percent from the previous year’s dividend of 1,500 won.
With Thursday’s third-quarter earnings result, Hyundai Motor’s accumulated car sales reached 3.08 million units in the first nine months of this year.
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