Hyundai Motor has delivered another earnings shock. The company announced on Jan. 24 that its operating profit reached 501.1 billion won in the fourth quarter of 2018, a drop of 35.4 percent from a year earlier. Yet the company’s sales in the four quarter increased 4.8 percent year on year.
Hyundai Motor posted a negative earnings surprise in the third quarter of 2018 by recording an operating margin of 1.2 percent. The figure improved to 2 percent in Q4, but was still the second-lowest since the introduction of the new International Financial Reporting Standards (IFRS) in 2010. Earlier, local securities companies estimated its Q4 operating profit at 700 billion won.
The company’s quarterly operating profit dipped below 1 trillion won in Q4, 2017 and has remained below that level for the fifth consecutive quarter. Besides, it posted a current net loss of 203.3 billion won in Q4, 2018, the first quarterly loss since 2010.
Under the circumstances, Hyundai Motor’s annual sales for 2018 edged up 0.9 percent from a year earlier to 97,251.6 billion won. During the same period, its operating profit dropped 47.1 percent and reached 2,422.2 billion won, the lowest since 2010. Likewise, its annual net profit plummeted 63.8 percent to 1,645 billion won, the lowest since 2010. The quarterly loss has to do with weakening of emerging market currencies and the base effect attributable to the U.S. corporate tax cut in Q4, 2017.