Hyundai Motor Posts Record Quarterly Sales and Operating Profit with 9.5% Profit Margin (Update)

2024 Q2 Business Performance Announcement

Hyundai Motor Company announced on the 25th that its operating profit for the second quarter of this year reached 4.2791 trillion KRW (consolidated basis), an increase of 0.7% compared to the same period last year. Sales revenue rose by 6.6% to 45.0206 trillion KRW during the same period.

The company explained that both operating profit and sales revenue were the highest ever on a quarterly basis. The previous quarterly sales record was 42.2332 trillion KRW in the second quarter of last year, and operating profit was also 4.2483 trillion KRW during the same period.

The net profit for the second quarter was 4.1739 trillion KRW, up 24.7% year-on-year. Sales centered on high value-added models improved the average selling price, and a favorable exchange rate environment continued, resulting in growth in both scale and profitability.

Hyundai Motor Company Headquarters
Photo by Yonhap News

A company official stated, "Despite the ongoing uncertain business environment due to demand slowdown caused by sustained high interest rates and rising incentives from intensified competition in major markets, we are maintaining stable profitability with an operating profit margin above 9%, based on sales focused on high value-added models and exchange rate effects."

Global wholesale sales volume was 1,057,168 units, a 0.2% decrease compared to the second quarter of last year. However, excluding sales in China, sales increased by 2.2% during the same period. Domestic sales volume was 195,737 units, down 9.6% year-on-year, while overseas sales rose 2.0% to 871,431 units.

The proportion of relatively expensive Sport Utility Vehicles (SUVs) and hybrid models increased. This was the reason sales revenue grew more than the increase in sales volume. Total eco-friendly vehicle sales reached 192,242 units, with hybrids alone selling over 120,000 units, an increase of more than 26% compared to last year.

Additionally, profitability improved due to the continued low value of the Korean won and the effect of declining raw material costs. The average KRW-USD exchange rate in the second quarter of this year was 1,371 KRW, 4.3% higher than the same period last year. The cost of goods sold ratio was recorded at 78.4%, 0.5 percentage points lower than last year.

Hyundai Motor Store in Pakistan
[Photo by Yonhap News]

The company forecasted that market conditions would not be easy in the second half of the year. The ongoing high interest rate environment has led to a full-scale demand slowdown, and intensified competition among companies could make the rising incentive trend a risk factor. They also noted increased policy uncertainties by region and expanded macroeconomic uncertainties mainly in emerging markets, making predictions difficult.

While the slowdown in electric vehicle demand is expected to continue for the time being, demand is anticipated to increase centered on hybrids. However, in the mid to long term, electric vehicle demand is expected to drive growth in the eco-friendly vehicle market. Hyundai plans to expand its electric vehicle-only brand (IONIQ) lineup as well as its hybrid lineup.

Meanwhile, the company decided on a dividend of 2,000 KRW per share for the second quarter of this year, a 33.3% increase from the quarterly dividend of 1,500 KRW last year.