Sales Decline but Operating Profit Up 30%... Hyundai Mobis Earnings Surprise

Hyundai Mobis announced on the 25th that its consolidated operating profit for the third quarter of this year reached 908.6 billion KRW, a 31.6% increase compared to the same period last year. Sales amounted to 14.0018 trillion KRW, a 1.6% decrease over the same period.

This is the highest quarterly operating profit ever recorded. Despite the decline in sales, the significant increase in operating profit was due to improved profitability in the AS business and the sales of higher-priced products. The company explained, "The supply of high value-added core parts centered on electronic components increased, and we strengthened overall profitability improvement activities such as cost reduction."

By business segment, AS division sales rose 10.4% year-on-year to 3.0606 trillion KRW. Operating profit increased by 20.7% to 815.8 billion KRW. Sales in the module and core parts division decreased by 4.5% to 10.9412 trillion KRW, but operating profit increased more than sixfold to 92.8 billion KRW during the same period. The module and parts division, which had posted losses in the previous two quarters, turned profitable this time.

Orders from overseas customers totaled 2.383 billion USD through the third quarter. During this period, orders were received from Japanese and Chinese automakers for brake parts, safety components, and others. The annual target of 9.3 billion USD was achieved at about one-quarter. The sluggish orders were attributed to uncertainties caused by the U.S. presidential election and a slowdown in electric vehicle demand. The company plans to hold a CEO Investor Day on the 19th of next month to announce measures to enhance corporate value.

A company official said, "The scale-up of order projects has increased performance volatility," adding, "We will do our best to achieve the annual order target."