Hyundai Motor Company announced its Q2 2023 results, including total sales of 1,059,713 units, revenue of 42.2497 trillion KRW (33.7663 trillion KRW from automobiles and 8.4834 trillion KRW from finance and other sectors), an operating profit of 4.2379 trillion KRW, and a net profit of 3.3468 trillion KRW (including non-controlling interests).
Hyundai’s Q2 2023 sales increased year-on-year due to improved supply of global automotive semiconductors and other parts, resulting in increased production alongside strong waiting demand. The operating profit rose compared to the previous year, driven by an increase in vehicle sales, an improved mix centered on high-value models, and favorable exchange rate effects.
A Hyundai representative stated, “As the semiconductor supply shortage situation improves, production is expanding. However, inventory levels in major markets remain low, and we anticipate sales to grow in the second half of the year, supported by strong waiting demand,” “However, there are concerns over decreased demand due to geopolitical risks and rising interest rates, which contribute to an uncertain business environment.”
Meanwhile, Hyundai adjusted its consolidated sales growth rate and operating profit margin upward as per the ‘2023 Annual Earnings Guidance’ announced earlier in January. The representative commented, “Due to increased sales volume associated with strong sales, improved mix from expanding high-value model sales, and the impact of a favorable exchange rate environment, the consolidated sales growth rate has been adjusted from the previous 10.5-11.5% to 14-15%, with the operating profit margin adjusted from 6.5-7.5% to 8-9%.”
In Q2 2023 (April to June), Hyundai sold 1,059,713 units in the global market, reflecting an 8.5% increase compared to the same period last year. (※ Based on wholesale sales)
In the domestic market, the sales of the ‘7th Generation All-New Grandeur,’ launched at the end of last year, and the ‘All-New Kona,’ released in the first quarter, took off, resulting in sales of 205,503 units, up 12.7% year-on-year, driven by strong performance in SUVs and high-value models. In the overseas market, with improved supply conditions for components leading to increased production, the global sales launch of the ‘Ioniq 6,’ and favorable sales of hybrid vehicles led to a 7.6% increase in eco-friendly vehicle sales, totaling 854,210 units.
Revenue totaled 42.2497 trillion KRW, a 17.4% increase compared to the same period last year, driven by increased sales volume, improved sales mix centered around Genesis and SUVs, and favorable exchange rates. The average exchange rate of the won to the dollar in Q2 2023 recorded 1,315 won, an increase of 4.4% compared to the previous year.
The cost of revenue ratio decreased by 0.4 percentage points to 79.0% compared to the previous year. This improvement was attributed to increased operating rates due to better supply conditions for components and favorable exchange rates. Selling and administrative expenses rose due to increased new car marketing costs and research expenses, but the ratio of selling and administrative expenses to revenue dropped by 1.3 percentage points to 11.0% compared to the same period last year.
As a result, the operating profit for Q2 2023 was 4.2379 trillion KRW, up 42.2% compared to the same period last year, marking the highest operating profit ever recorded for a quarter. Hyundai has set a new record for operating profit for three consecutive quarters.
Ordinary profit and net profit were reported at 4.8344 trillion KRW and 3.3468 trillion KRW, respectively.
Meanwhile, for the cumulative performance for Q2 (January to June), total sales reached 2,081,540 units, total revenue was 80.0284 trillion KRW, and operating profit was 7.8306 trillion KRW.
Hyundai expects solid performance moving forward due to improved operating rates and continued strong waiting demand, but foresees persistent uncertainty in the business environment due to geopolitical tensions, inflation, and reduced demand stemming from interest rate hikes. In addition, the potential for increased marketing costs due to heightened competition and exchange rate volatility are seen as burdens on its operations.
The global automotive market is expected to continue its strong growth driven by enhanced environmental regulations in key countries, increased investments in eco-friendly infrastructure, and a growing preference for eco-friendly vehicles centered on electric cars. Hyundai plans to focus on expanding EV sales through the global launch of the ‘Ioniq 6,’ the introduction of ‘Ioniq 5 N,’ and ‘All-New Kona Electric,’ maximizing sales through production and sales optimization and expanding market share and profitability by improving the sales mix centered on high-value models.
In addition, Hyundai will implement the newly announced quarterly dividend from the ‘Medium to Long-Term Shareholder Return Policy,’ commencing this Q2, with the quarterly dividend set at 1,500 KRW (common stock basis). By implementing quarterly dividends, Hyundai plans to reduce stock price volatility and continuously enhance the attractiveness of long-term shareholding.
By: Lee Sang-jin daedusj@autodiary.kr