Hyundai Motor Co.’s share price down, posts Q2 profit decline on stronger domestic currency

The biggest auto manufacturer in South Korea – Hyundai Motor Co. -posted second-quarter figures today, revealing that its profit declined due to the strong performance of the South Korean won that affected the companys earnings generated at overseas markets.

According to the companys statement, the net income of Hyundai Motor Co. fell by 6.5% from 2.4 trillion won over the same period a year earlier to reach 2.24 trillion won (2.2 billion dollars) over the second fiscal quarter ended June. This result trailed the median analysts forecasts of 2.25 trillion won.

Mr. Lee Won Hee, who is the Chief Financial Officer of the company said today on a conference call, which was cited by Bloomberg: “Our outlook for the rest of the year doesn’t look so positive. The won strengthened against almost all of the global currencies in the first half of this year, making the traditional methods of hedging currency risks, such as diversifying settlement currencies, obsolete.”

Recently, the company, which is the largest auto maker in South Korea and also the fifth biggest auto manufacturer in the world, has been focused on dealing with the influence of the stronger won, especially against the weaker yen. This made its exports more costly than initially planned.

In addition, over the year ended June 30th, the South Korean won held a strong performance against every major currency except for the New Zealand dollar. The South Korean currency gained about 12.9 percent versus the dollar.

Hyundai Motor Co. was 1.55% up to close at 229,000 South Korean won per share yesterday, marking a one-year change of +0.97%. According to the information published on the Financial Times, the 33 analysts offering 12-month price targets for Hyundai Motor Co. have a median target of 294,000, with a high estimate of 330,000 and a low estimate of 251,000. The median estimate represents a 30.38% increase from the last price of 225,500.