Hyundai Motor Co. delivered a negative earnings surprise in the first quarter as its net profit was almost halved on the strong won and weak sales in the US and China.
The company posted 731.6 billion won (US$678 million) in net profit in the first three months of the year, a 48 percent drop from 1.406 trillion won a year earlier.
A company official attributed the poor showing to the strength of the Korean currency against the dollar and sluggish demand in the United States and China.
He also cited labor strikes over wage increase, which shortened working days. The company’s union went on a strike in January as the protracted wage talks for 2017 continued into 2018.
Hyundai Motor suffered a drop in sales in the two key markets, the United States and China. Its first-quarter U.S. sales totaled 273,000 vehicles, a 4.9 percent drop from 287,000 units a year earlier. Sales in China plunged much more sharply. Hyundai sold 163,000 cars in the January-March period, down 17 percent from 196,000 a year ago.
Hyundai’s global sales totaled 1.05 million vehicles in the first quarter, down 1.7 percent from 1.07 million units during the same period in 2017.
The company recorded 22.437 trillion won in revenue in the first quarter, a 4 percent drop from 23.366 trillion won a year earlier. Operating profit plummeted 46 percent to total 681.3 billion won in the first quarter.