Hyundai Motor ups full-year sales target while recall cuts Q3 income to half

[Photo by MK DB]

South Korea¡¯s Hyundai Motor Co. estimated stronger annual sales with on-year growth of around 20 percent for 2022 on favorable exchange rate terms and easing in chip shortage that helped sales of green and premium cars, although defeated in the third quarter from provision related to recall cost for Theta 2 GDi engine.

The South Korean auto giant reported Monday an operating income of 1.55 trillion won ($1.1 billion) in the third quarter ended on Sept. 30, 2022, falling 47.9 percent from three months ago and 3.4 percent from a year earlier. The loss owed largely to the provision of 1.36 trillion won for the recall cost of faulty engines.

Operating margin recorded 4.1 percent, down 1.5 percentage points from a year ago.

Revenue grew 4.7 percent on quarter and 30.6 percent on year to 37.7 trillion won, renewing the past three-month high of 36 trillion won in the previous quarter.

Net income stopped at 1.4 trillion won, down 54.2 percent on quarter and 5.1 percent on year.

Hyundai Motor shares lost 3.3 percent to close at 161,500 won on Monday.

The company last week gave heads-up on the reflection of 1.36 trillion won loss reserves related to Theta 2 engine quality issues in the third-quarter account. Kia which also used the same engine also is booking 1.54 trillion won in loss reserves.

If not for the provision, analysts estimated its third-quarter operating income would come at 3.3 trillion won on sales of 36 trillion won. The automaker kept up a hot earnings streak in the first half.

The automaker said its global sales grew 14.0 percent in the third quarter as the supply shortage of auto chips eased.

It revised up sales outlook for the full 2022 on the projection of a better fourth quarter.

It estimates it would sell 4.01 million vehicles this year, slightly off from 4.32 million units target set in January. Revenue would grow around 20 percent from last year, higher than the 13~14 percent estimated at the beginning of the year thanks to favorable foreign currency conditions and robust sales of green and premium fleet. The operating margin estimate was pushed up to 6.5 from 7.5 percent.

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