Hyundai Mobis Reports Operating Profit of 1.83 Trillion KRW Last Year, Down 22.4% YoY

Impact of Global Auto Market Slump Due to COVID-19
Q4 Operating Profit Up 10.7% YoY

[Asia Economy Reporter Ki-min Lee] Hyundai Mobis announced on the 28th that its sales and operating profit last year decreased by 3.7% and 22.4%, respectively, recording 36.6265 trillion KRW and 1.8303 trillion KRW.

Since the beginning of last year, the global automotive market has been sluggish due to the spread of the novel coronavirus disease (COVID-19), and the decline in demand for A/S parts affected the performance.

On the other hand, in the fourth quarter of last year, sales reached 10.6764 trillion KRW and operating profit was 702.3 billion KRW. This represents an increase of 2.6% in sales and 10.7% in operating profit compared to the fourth quarter of 2019.

Hyundai Mobis explained that despite the global decrease in finished vehicle production due to the spread of COVID-19, sales growth was driven by the sale of electrification parts, and profitability improved through cost reduction activities under emergency management. In fact, in the fourth quarter of last year, sales in the core business areas of module and key parts manufacturing increased by 4% compared to the same period last year, reaching 8.8015 trillion KRW, and operating profit increased by 88% to 304.5 billion KRW.

In particular, as the production of eco-friendly vehicles centered on electric vehicles increased, the electrification business sector achieved sales of 1.2569 trillion KRW in the fourth quarter of last year, growing 46.5% compared to the same period the previous year. Hyundai Mobis has maintained a sharp growth trend, surpassing 1 trillion KRW in sales of electrification parts for the first time in a quarter in the third quarter of last year. The electrification business sector is expected to continue growing as it plans to supply key parts such as PE modules and battery systems for the electric vehicle-exclusive platform (E-GMP).

A Hyundai Mobis official stated, “This year, we will further focus on improving profitability while strengthening crisis management and response capabilities for uncertain domestic and international business environments, and will also expand investments for the future and global collaboration.”

Meanwhile, Hyundai Mobis invested 1.0122 trillion KRW, equivalent to 8.7% of sales in parts manufacturing and electrification sectors last year, in research and development (R&D), and for the first time, the number of R&D personnel both domestically and abroad exceeded 5,000.

Based on this, Hyundai Mobis plans to aggressively pursue orders for key parts from overseas finished vehicle manufacturers this year as well. Despite difficult circumstances such as delays in order schedules due to COVID-19 last year, Hyundai Mobis achieved orders worth 1.758 billion USD (approximately 1.96 trillion KRW). This year, leveraging its core parts technology competitiveness, the company aims to diversify its product portfolio and achieve orders worth 2.879 billion USD (approximately 3.21 trillion KRW).