[Yonhap News Photo]
SEOUL -- Hyundai Motor Co., the country's biggest carmaker by sales, said Thursday its second-quarter net profit fell 11 percent as a strong won and increased fixed costs cut into its bottom line.
Net profit for the April-June period fell to 810.7 billion won (US$724 million) from 913.6 billion won a year earlier, the company said in a statement.
"The won's strength against the U.S. dollar and reduced production at Hyundai's U.S. plant, which was designed to stabilize its vehicle inventory there, ate away the company's second-quarter profitability," the statement said. The dollar fell to an average of 1,078.57 won in the second quarter from 1,129.43 won a year earlier, according to data from the Bank of Korea.
Looking ahead, the maker of the Sonata sedan and the Santa Fe SUV expressed concerns that the spread of protectionism in major trading partners, such as the U.S. can become a source of concern in the second half. The U.S. government has recently proposed a 25 percent tariff on imported vehicles, citing national security reasons. It will deal a heavy blow to Korean carmakers, if the move takes effect.
"As it is hard to predict global market conditions in the latter half, the company will make all-out efforts to boost sales by launching the Santa Fe SUV in the U.S. market this summer," a company official said.
Operating profit plunged 29 percent to 950.8 billion won in the second quarter from 1.345 trillion won a year ago. Sales were up 1.7 percent to 24.7 trillion won from 24.3 trillion won during the same period, it said.
In the January-June period, net profit slumped 34 percent to 1.54 trillion won from 2.32 trillion won in the year-ago period. Operating income declined 37 percent on-year to 1.63 trillion won in the first six months from 2.6 trillion won. Sales fell 1.1 percent to 47.25 trillion won from 47.67 trillion won.
(Yonhap)
reporter
Lim Chang-won
cwlim34@ajunews.com
