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S.Korea’s Hyundai Motor posts double-digit decline in Q3 earnings

SEOUL, Oct. 25 (Xinhua) — Hyundai Motor, South Korea’s biggest carmaker, posted a double-digit decline in its third-quarter earnings on soft demand in China, the world’s biggest automobile market, the company said Thursday.

Hyundai’s operating profit plunged 76 percent over the year to 288.9 billion won (253.6 million U.S. dollars) in the July-September quarter.

It was the lowest quarterly earnings since a new accounting standard, or International Financial Reporting Standards (IFRS), was adopted in 2010.

Revenue rose 1 percent to 24.4 trillion won (21.4 billion U.S. dollars) in the September quarter, but net income dived 67.4 percent to 306 billion won (26.9 million U.S. dollars).

Demand for Hyundai models among Chinese consumers weakened temporarily, leading to the decline in global car sales, Hyundai said in a statement.

Hyundai’s global auto sales fell 0.5 percent over the year to 1,121,228 units in the September quarter. The number, which excludes sales in China, rose 0.3 percent to 937,660 in the cited period.

In the domestic market, the car sales shrank 1.4 percent to 171,443 units in the quarter on less business days that offset a positive effect from the launch of new sports utility vehicle (SUV) such as Santa Fe.

Overseas sales dipped 0.4 percent to 949,785 vehicles on soft demand from China and North America, which offset solid demand from Europe and emerging economies.

Hyundai stocks plummeted 6 percent to 110,000 won (97 U.S. dollars), the lowest close in around eight and a half years.

A Hyundai official said the company’s revenue grew on an expanded sale of SUVs though negative external factors, such as the depreciation of emerging market currencies and the local currency’s ascent to the U.S. dollar, influenced profitability.

The Brazilian currency tumbled 20.4 percent versus the South Korean currency in the third quarter from a year ago.

Operating costs increased 8.6 percent in the quarter on costs to expand marketing and apply enhanced technology to existing models, Hyundai said.

For the first nine months of this year, Hyundai sold 3,362,758 vehicles at home and abroad, up 2.8 percent compared with the same period of last year.

In the January-September period, Hyundai’s revenue shed 0.4 percent from a year earlier. The operating profit sank 49.4 percent in the period.

Hyundai forecast its profitability would be enhanced from the fourth quarter thanks to the launch of new SUV and Genesis models as well as models of new design.

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