Roundup: Hyundai Motor's Q3 operating profit declines to 5-year low

Hyundai Motor, South Korea's top carmaker, posted the lowest earnings in around five years on the back of a rise in marketing costs and currency volatility, a regulatory filing showed Thursday.

Operating profit reached 1.50 trillion won (1.33 billion U.S. dollars) in the three months ending Sept. 30, down 8.8 percent from a year earlier. It marked the lowest since 1.24 trillion won tallied in the fourth quarter in 2010.

The falling pace clearly slowed down from an 18.1 percent plunge in the first quarter and a 16.1 percent decline in the second quarter.

Revenue increased 10.1 percent from a year earlier to 23.43 trillion won in the third quarter, but net income sank 25.3 percent to 1.21 trillion won.

Despite the relatively solid car sales, an increase in marketing costs and a volatility in the foreign exchange market lead in the worse-than-expected earnings.

Market expectations for the operating profit had been set at 1.59 trillion won for the third quarter.

"The South Korean currency weakened to the U.S. dollar in the quarter, but it was offset by steeper declines in the euro and emerging currencies such as those of Russia and Brazil," a Hyundai official said.

The official said that operating costs increased as the automaker stepped up marketing efforts in key markets like North America to tackle marketing efforts from competitors supported by the weakness of the Japanese yen and the euro.

Hyundai's global auto sales came in at 1,121,796 units during the three-month period through September, slightly down 0.6 percent from the same period of last year.

For the first nine months of this year, the company's car sales in the global market reached 3,537,573 units, down 2.4 percent from a year earlier.

During the January-September period, the number of Hyundai products sold in China and the United States, the world's top two auto markets, declined 10.8 percent and 6.0 percent each.

Car sales both in Russia and Brazil dipped 4.8 percent in the third quarter, but those in India and Turkey increased 3.6 percent and 10.6 percent respectively.

Hyundai forecast that its car sales in China would recover in the fourth quarter due to a cut in auto purchase tax, but it said that the sales recovery would not be that big amid economic slowdown.

For the first nine months of this year, the cumulative operating profit reached 4.84 trillion won, down 14.7 percent from a year earlier.

Cumulative revenue gained 2.3 percent to 67.19 trillion won in the same period, but net income slid 16.9 percent to 4.98 trillion won. Enditem