Hyundai Q2 seen up on sales

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Seoul, July 18:: consumers look for smaller cars.

For 2008, Hyundai is expected to post a 31 percent jump in net profit to 2.19 trillion won, according to a poll of 24 brokerages by Reuters Estimates.

Kia is expected to post a 133 billion won in operating profit during the second quarter, a Reuters poll of 11 analysts showed, compared to a 37 billion won profit a year ago.

But the softer won is a double-edged sword for Hyundai and Kia as the weakness in the currency boosts values of foreign currency debts and raw material prices.

Hyundai reported a 138 billion won loss related to currency derivatives used to mitigate foreign debt in the first quarter.

Kia's second-quarter net profit is likely to be stable at 61.7 billion won from a 61.4 billion won a year ago, despite a strong jump in operating profit, as the weaker won boosts the value of foreign currency debts.

Earlier in July, Hyundai's unionised workers staged partial strikes for four days so far over a wage deal, which the company estimates costed it 238.7 billion won in lost output, although those losses are usually made up later.

Shares in Hyundai, valued at around $14.6 billion, fell 10 percent in the quarter, underperforming an 1.7 percent fall in the wider market.