Yahoo!  My Yahoo!  Mail
				News Home - Help

News Home Top Stories World Asia Pacific Business Technology Entertainment Sports Photos -- News by Country -- Indonesia Malaysia Philippines Singapore Thailand -- Greater Asia -- China Hong Kong Taiwan
	Yahoo! Asia News Search Yahoo! News

		advertisement
Monday October 30, 1:52 PM Hyundai, Kia profit hit by weaker sales, won SEOUL, Oct 30 (Reuters) - Hyundai Motor Co. said on Monday its third-quarter net profit nearly halved, while affiliate Kia Motors Corp. swung to a loss as both were hurt by labour disputes and a firmer won currency. Hyundai, the world's No. 6 auto maker along with Kia, should see earnings improve in the current quarter, analysts said, as overseas sales outweigh sluggish demand in its home market. "Hyundai's results missed expectations as sales were much lower than forecast amid the strikes, but the fourth-quarter should be better, helped by a post-strike order backlog," said Yong Dae-in, an auto analyst at Goodmorning Shinhan Securities. "Next year, exports are expected to propel Hyundai's earnings although the outlook for the local sales is not so good." Hyundai, which controls half the South Korean auto market, earned a July-September net profit of 282.8 billion won ($298.6 million), down 47.1 percent from 534.9 billion won a year ago and well short of a 389.2 billion won forecast by nine analysts polled by Reuters. Operating profit, dented by a month-long strike, fell by nearly a third to 183.2 billion won. "The drop in third-quarter earnings was not because its sales were sagging, but the limited supply due to strikes failed to meet demand," said Kang Sang-min, analyst at Tongyang Investment. Hyundai, which makes the Sonata sedan and Santa Fe SUV, booked an 18.9 billion won ($20 million) loss from derivatives linked to Kia, versus a 134 billion won profit a year earlier, according to a company official. Kia's third-quarter saw its first net loss since Hyundai bought into the company in 1999, hit by higher marketing costs. Kia is seen under more pressure amid intense competition in a weaker domestic market, although some analysts see some hope with its higher-end models such as the Opirus sedan. Hyundai shares fell 1.58 percent to 74,900 won by 0447 GMT, underperforming the broad index's 1.03 percent drop. Kia was off 1.03 percent. Hyundai's full-year profit is seen dropping by nearly a fifth to 1.86 trillion won from 2.31 trillion last year, according to 25 analysts surveyed by Reuters Estimates, indicating fourth-quarter profit may rise by a third to 871.1 billion won. The won on average rose 7.8 percent versus the dollar in July to September, but eased 0.5 percent from April-June. Hyundai's third-quarter sales fell 4.3 percent to 5.89 trillion won as sales volume from local plants fell 6 percent. Hyundai Motor said the strikes cost the company 1.3 trillion won, or 93,882 vehicles in lost output. The company's overall U.S. sales rose 0.37 percent while sales of its U.S. unit, which opened a plant mainly making Sonatas in Alabama last year, jumped 86 percent. Last week, Japanese rival Honda Motor Co. posted a surprise drop in quarterly net profit due to finance-related losses and Nissan Motor Co. posted lower operating profit as an ageing product line hit global sales. Hyundai's shares, valued at $18 billion -- slightly below General Motors Corp. -- gained 0.5 percent in the third quarter, underperforming a 5.9 percent rise in the wider market. KIA AT A LOSS Kia, which has a 23 percent domestic market share, posted a 43.9 billion won net loss for July-September, surprising analysts who had predicted a 29.5 billion won profit. Operating loss was 87.4 billion won versus a year-ago loss of 57.1 billion won. "Weaker sales and higher costs in production and marketing keep pressuring Kia, whose brand and competitiveness are sluggish,' said Cho Soo-hong, a Dongbu Securities analyst. "Kia does not have a model that can boost overall sales, although the Opirus sells quite well." Full-year net profit at Kia, whose models include the Optima and Sportage, is expected to fall 44.5 percent to 377.8 billion won, according to Reuters Estimates. Unit sales from local factories fell 1.3 percent. Kia shares, valued at $5.3 billion, fell 5.5 percent in July-September. ($1=947.0 won) (Additional reporting by Kim Yeon-hee)