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16% Jump In Hyundai Profitability Despite Russia Production Setback

Hyundai credited strong sales of electric vehicles and the luxury Genesis for its Q1 profitability amidst Russian production shutdown.

16 Percent Jump In Hyundai Profitability Despite Russia Production Setback

EVs and luxury vehicles helped the South Korean automaker cope with the aftermath of the Ukraine war. Hyundai Motor announced on Monday that its operating profit increased by more than 16% year over year in the first quarter, thanks to strong sales of electric vehicles and the luxury Genesis, which helped the company forecast the impact of the Ukraine conflict and the suspension of manufacturing in Russia. The South Korean carmaker, which, together with its smaller partner Kia, is the world’s fifth-largest, reported an operating profit of 1.9 trillion won ($1.5 billion) in the first quarter of this year, increasing 16.4% from the same time the previous year. Hyundai’s revenue increased 10.6% to 30.3 trillion won, with a 16.8% increase in net profit to 1.8 trillion won.

Hyundai Motor and Kia are part of the Hyundai Motor Group, including Hyundai Mobis, an auto parts maker, and Hyundai Wia, which makes car components, industrial machinery, and military goods. Hyundai Motor stated that despite a decrease in sales volume in a challenging economic environment, robust sales of SUV and Genesis luxury vehicles, decreasing incentives, and a favourable foreign currency environment helped lift revenue in the first quarter.

On Monday, Hyundai’s stock rose 1.1 percent to 182,000 won, thanks to better-than-expected profits. According to FnGuide, a business analysis expert, the market consensus for the first quarter was an operating profit of 1.6 trillion won and revenue of 29.8 trillion won. The gains come after Hyundai’s production lines in St. Petersburg, Russia, were shut down last month due to international sanctions imposed in response to the nation’s war on Ukraine. Hyundai stated that it intends to mitigate the loss by expanding manufacturing in other regions.

Hyundai Motor Group noted on Monday that Hyundai Motor, Kia, Hyundai Mobis, and Hyundai Wia had joined Climate Group’s RE100 program, a global movement in which significant firms agree to move to 100% renewable energy. In a statement, the group said that it is evaluating various renewable energy procurement options, including self-production through solar panels, power purchase agreements with wind and solar energy providers, and Korea Electric Power Corporation’s Green Premium program. On a conference call to discuss the company’s latest results, Seo Gang-Hyun, a Hyundai vice president, stated that the company would shift car parts for Russia to other locations to set up manufacturing in those areas.

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