(ATTN: CORRECTS figures in 2nd para; ADDS details throughout)
By Choi Kyong-ae
SEOUL, July 22 (Yonhap) — South Korea’s Hyundai Motor Co. said Thursday its second-quarter net profit more than quintupled compared with a year earlier on a base effect and strong sales of its high-end sport utility vehicles
Net profit for the three months that ended in June jumped to 1.98 trillion won (US$1.7 billion) from 377.27 billion won in the same period last year, the company said in a statement.
The strong result was helped by last year’s low base effect from the COVID-19 pandemic and robust demand for Hyundai’s high-margin SUV models that helped offset output disruptions by chip shortages, according to Seo Gang-hyun, an executive in charge of the company’s finance and accounting division.
“Faced with worsening chip shortages in May and June, Hyundai was quick to change vehicles in production and lineups to minimize the impact from the parts problems. Such efforts allowed the company to navigate the chip shortage better than other carmakers,” he said.
A combination of its improved product mix, lower incentives and higher average selling prices, particularly in the world’s most important U.S. market, also helped boost the quarterly profits, Hyundai said.
Looking ahead, the company expected prolonged component-supply issues, rising raw material prices, and weak emerging market currencies to continue to weigh on earnings results in the third quarter.
To prop up sales in the second half, Hyundai plans to launch the GV70 SUV, the all-electric G80 sedan and the Santa Cruz pickup truck in the U.S. market.
Operating profit nearly tripled to 1.66 trillion won in the second quarter from 590.32 billion won a year ago. Sales rose 39 percent to 30.33 trillion won from 21.86 trillion won during the same period.
From January to June, net income jumped to 3.5 trillion won from 929.95 billion won in the year-ago period.
Operating profit climbed to 3.54 trillion won in the first half from 1.45 trillion won during the same period last year. Sales rose 22 percent to 57.72 trillion won from 47.18 trillion won over the cited period.