SEOUL, April 22 (Yonhap) — Hyundai Motor Co. said Thursday its first-quarter net profit nearly tripled compared to a year earlier on a base effect and an improved product mix.
Net profit for the three months that ended in March soared to 1.52 trillion won (US$1.36 billion) from 552.68 billion won a year ago, the company said in a statement.
The net result exceeded the median forecast of 1.32 trillion won by local brokerages.
In the first quarter, Hyundai suspended some of its assembly lines in Korea due to shortages of parts from China amid the coronavirus outbreak. There was no such one-off factor in its first-quarter results for this year.
“Moreover, there was no major impact of the global semiconductors shortage on Hyundai’s production in the first quarter as it kept its inventories at manageable levels,” Executive Vice President Seo Gang-hyun, head of Hyundai’s Finance & Accounting Division, said in a conference call with analysts.
Robust sales of its SUV and high-end Genesis models in the United States and emerging markets also helped offset the impact of the won’s strength against the U.S. dollar and drive up its quarterly net income, he said.
Looking ahead, the executive said the company will benefit from the coronavirus-caused base effect in the second quarter but an extended chip shortage will weigh on its bottom line.
Analysts expect carmakers will have difficulties in securing chip parts through the third quarter, as it would take time for their overseas chip suppliers to resume production following natural disasters and fires.
Netherlands-based NXP Semiconductors N.V. and Munich-based Infineon Technologies AG temporarily suspended their micro control unit (MCU) plants in Texas due to a cold wave, while Japan’s Renesas Electronics Corp. partially shut down its MCU plant in Ibaraki Prefecture due to a recent fire.
Worse still, a drought-caused delay in the supply of MCUs from Taiwanese semiconductor firm TSMC will also deliver a blow to automakers.
In the second quarter, Hyundai said it will focus on promoting the IONIQ 5 all-electric model, its SUV and independent Genesis brand vehicles to ride out the pandemic.
Operating profit jumped 92 percent to 1.66 trillion won in the first quarter from an operating income of 863.78 billion won a year ago. Its operating profit margin also jumped to 6 percent from 3.4 percent over the mentioned period.
Hyundai offered fewer incentives and spent less on marketing costs in the U.S. market as it kept low inventories amid the pandemic. Moreover, strong demand for its SUVs pushed up prices, the company said.
Sales rose 8.2 percent to 27.39 trillion won from 25.32 trillion won over the cited period.
On Thursday, Hyundai shares rose 0.2 percent to 226,000 won, roughly in line with the broader KOSPI’s 0.18 percent gain.