South Korea’s Hyundai Motor Co said its net profit slumped for the sixth quarter in a row, in line with forecasts, as weak sales in key markets like China and the United States and the won’s strength continue to shackle the automaker.
The firm, which with affiliate Kia Motors ranks fifth in global auto sales, said on Thursday its net profit fell 24 percent to 1.7 trillion won in April-June from 2.2 trillion won a year earlier. That matched the average estimate of 14 analysts polled by Thomson Reuters I/B/E/S.
Hyundai said second-quarter sales to China – its biggest market – dropped by around 8 percent from a year earlier as competition intensified and growth in the world’s second-largest economy slowed.
Profit was also squeezed by increased spending on sales incentives to lure customers in China and the United States, where Hyundai’s limited sports utility vehicle range has cost it market share. The rising popularity of foreign cars in South Korea has also undercut its long-dominant position at home.
Currency moves have worked against the automaker. The won strengthened by a 11.5 percent against the yen and by 16.4 percent against the euro on average during the second quarter compared with a year earlier, giving an edge to Japanese and European competitors in export markets.
The sequence of profit drops has discouraged investors, with shares having fallen about 22.5 percent so far this year as of Wednesday’s close. Hyundai Motor shares have slid close to their lowest level in nearly five years.
In a move to soothe investor concerns, the automaker said earlier on Thursday it will pay an interim dividend for the first time, of 1,000 won per share.
The automaker is counting on revamped model launches set for the second half of this year to help it reverse out of the trend. Hyundai is expected to start selling its Tucson SUV in the US market at the end of July, and will also launch new versions of its Elantra sedan and Equus luxury model this year.