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Hyundai Motor reported better than expected revenues and operating profit in the first quarter even as the South Korean automaker saw sales decline in China amid a row between Seoul and Beijing over the former’s deployment of a missile defence system.

The company reported Won23.37tn ($20.82bn) in sales revenue for the quarter ended March, reflecting a 4.5 per cent rise from a year prior and besting a median estimate of Won22.5tn from economists surveyed by Bloomberg.

Units sold came to 1.09m for the period, down by 20,000 from the first quarter of 2016 “due to weak sales in emerging markets including China”, the company said. While operating profit also declined 6.8 per cent year on year to Won1.25tn, that was less severe than an expected fall to Won1.18tn.

Hyundai Motor cautioned that while “uncertainty in business environment is likely to continue for the time being”, it nonetheless expected improvements to its small SUV and Genesis-brand models to help “regain sales momentum going forward, which will lead to a gradual recovery in earnings.”

Hyundai has seen its shares dip recently on reports it slashed production in China, where unit sales halved year on year in March.

It and other South Korean companies have been caught in the cross hairs of Chinese consumers angered by Seoul’s decision to host a US anti-ballistic missile system amid heightened tensions with North Korea, which this month conducted another nuclear test and celebrated the birthday of founder Kim Il Sung on April 15.

Copyright The Financial Times Limited 2017. All rights reserved.
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