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On Thursday, South Korea's Hyundai Motor Co. announced a 31% fourth-quarter profit increase. However, the figure fell short of analysts' expectations due to unfavorable exchange rates and one-off costs associated with selling its Russia plant in December.
Unfavorable Exchange Rates and Plant Sale Impact Profit
In collaboration with its affiliate Kia Corp, Hyundai Motor disclosed a net profit of 2.2 trillion won ($1.65 billion) for October-December, as per Korea Times. This represented a year-on-year growth, but it failed to meet the average forecast of 2.9 trillion won by LSEG SmartEstimate. This platform aggregates predictions from analysts known for their accuracy.
Reuters reported that the automaker, facing challenges, took a 287 billion won ($219.2 million) loss from selling its Russia plant, where operations were halted in March 2022. This contributed to the lower-than-expected earnings.
Despite the missed profit, Hyundai Motor's shares rose by 2.4% following the earnings announcement, outperforming the benchmark KOSPI's flat performance.
Hyundai Motor's Endeavors and Global Position
Hyundai Motor, ranked the world's third-largest automaker by sales, plays a prominent role in the automotive industry. Together with Kia Corp, the company strives to provide quality vehicles to customers worldwide.
Looking ahead, Hyundai Motor aims to navigate the ever-changing industry landscape and optimize its performance further. This includes advancing its electric vehicle lineup and embracing new technologies to meet the evolving needs of consumers.
LSEG SmartEstimate's average forecast, which aggregates estimates from consistently accurate analysts, is a benchmark for evaluating a company's financial performance. It provides valuable insights to investors and stakeholders.
Plant Sale Implications and Financial Impacts
The sale of Hyundai Motor's Russia plant came with one-off costs, weighing on the overall profitability of the fourth quarter. The company remains focused on managing expenses and optimizing operations to ensure long-term success.
Following the announcement of the earnings report, Hyundai Motor's shares experienced a 2.4% increase in trading. This positive market response indicates investors' confidence in the automaker's potential for growth and resilience.
Photo. Hyundai Newsroom
