Thursday, October 27, 2005

Hyundai Motor says third-quarter profit rises 27 percent

Associated Press

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SEOUL, South Korea -- Hyundai Motor Co. said its third-quarter net profit rose 27 percent from a year earlier as overseas sales helped offset production losses from a 12-day workers' strike.

South Korea's largest automaker said it earned 534.9 billion won ($512 million) in the three months ended Sept. 30, up from 421 billion won ($403 million) a year earlier.

Total sales during the quarter fell 6 percent to 6.15 trillion won ($5.9 billion) from 6.54 trillion won ($6.3 billion; euro5.2 billion) a year earlier, as vehicle sales decreased 10.9 percent to 360,856 because of the strike and a one-week partial plant shutdown for a car model shift at the end of July.

The results beat expectations. Analysts surveyed by Dow Jones Newswires predicted a net profit of 463.1 billion won ($443 million) and sales of 6.29 trillion won ($6.02 billion).

Hyundai, maker of the Sonata midsize sedan and the luxury Equus, lost 43,000 vehicles and sales worth 591 billion won ($567 million) to the strike that began in late August.

The strike ended with Hyundai offering salary and bonus increases and work hour reductions. Hyundai's union has gone on strike every year but one since 1987 and the walkouts are seen here as part of the annual negotiating process at the company.

Overseas sales of higher margin models such as the Sonata and the Santa Fe and Tucson sport utility vehicles "contributed to the strength of the bottom line," said Oles Gadacz, Hyundai's director global public relations.

Hyundai Motor also gained from better performance by its credit card and auto financing units and its overseas auto manufacturing units in China, India, Turkey and the United States.

Vehicles sales at the overseas units totaled 183,201 in the third quarter, up 60 percent from 114,560 the year before.

Subtracting the 32,770 vehicles produced during the quarter by the automaker's plant in Montgomery, Alabama, which wasn't on line in the third quarter last year, overseas sales grew 31 percent.

The Seoul-based company has ambitions with its affiliate Kia Motors Corp. to become the world's sixth-largest carmaker by 2009. Hyundai owns 38.7 percent of Kia.

Together they were the world's ninth-largest auto manufacturer with combined production of 3.18 million vehicles in 2004, according to Automotive News. They trailed No. 8 Honda Motor Co. of Japan by just 230 vehicles.

Hyundai shares rose 1.7 percent to close at 76,500 won ($73). The company announced its results during trading hours.