Hyundai Motor's Q2 profit rebounds 1st time in 9 quarters

South Korean top automaker Hyundai Motor saw its second-quarter operating profit rebound for the first time in nine quarters due mainly to strong demand in the local market caused by the government's temporary cut in consumption tax for cars.

Operating profit posted 1.76 trillion won (1.55 billion U.S. dollars) during the April-June period, up 0.6 percent from a year earlier, the company said in a statement. It was the first increase in nine quarters since the first quarter of 2014.

From the previous three-month period, the second-quarter profit jumped 31.2 percent.

Revenue increased 8.1 percent from a year earlier to 24.68 trillion won in the second quarter, but net income reduced 1.5 percent to 1.76 trillion won. Hyundai said the revenue was more than any second-quarter figures in the company's history.

The second-quarter rebound in earnings was mainly attributable to a temporary cut in consumption tax for cars to boost the lackluster private consumption.

However, the third-quarter Hyundai earnings are expected to decline as workers went on a strike calling for a wage hike and improved working conditions. The country's trade minister warned of the strike that can weigh down on the overall economic recovery.

For the first six months of this year, Hyundai's operating profit amounted to 3.1 trillion won, down 7 percent from the same period of last year.

Revenue increased 7.5 percent from a year earlier to 47.03 trillion won during the January-June period, but net income also dipped 6.4 percent to 3.53 trillion won. The operating margin stood at 6.6 percent in the first half, down 1.0 percentage point from a year ago.

A Hyundai Motor official said that the first-half slump was mainly attributable to weaker demand for Hyundai-produced vehicles in emerging markets, but he expected a gradual improvement in the second half.

Hyundai's global auto sales fell 0.9 percent from a year earlier to reach 2,393,241 units in the first half. Car sales in the local market increased 4.4 percent to 350,006 units, but overseas sales reduced 1.8 percent to 2,043,235 vehicles.

Hyundai said uncertainties would spread in the second half following the Brexit, or British referendum to leave the European Union (EU), that could weaken consumption especially in European countries amid the falling global trade.

As part of efforts to overcome the difficulties, the automaker plans to increase the offerings of sport utility vehicles (SUVs), which are gaining popularity across the globe, while seeking to expand the presence of its premium brand Genesis with the launch of new models. Endit