Hyundai Motor's operating profit hit 7-year low in 2017

Hyundai Motor, South Korea's biggest automaker, posted the lowest operating profit in seven years in 2017 due to weak demand in China and the local currency's ascent to the U.S. dollar, the company said Thursday.

Consolidated operating profit was 4.57 trillion won (4.31 billion U.S. dollars) in 2017, down 11.9 percent from a year earlier. It marked the lowest since 2010 when the profit reached 5.92 trillion won.

The sharp fall was largely attributable to soft demand in China, the world's largest auto market.

Hyundai's global car sales declined 6.4 percent to 4,506,527 units in 2017. Excluding sales in China, the global auto sales rose 1.6 percent.

Hyundai's revenue rose 2.9 percent over the year to 96.38 trillion won (90.87 billion U.S. dollars) in 2017.

The South Korean currency sharply appreciated to the U.S. dollar last year. The won/dollar exchange rate was 1,070.5 won per dollar as of end-2017, down 12.8 percent from a year earlier.

The ratio of operating profit to revenue stood at 4.7 percent in 2017, down 0.8 percentage points from the previous year. It was the lowest in seven years.

Net income tumbled 20.5 percent to 4.55 trillion won (4.29 billion U.S. dollars) in 2017 due to weaker demand for Hyundai-made cars among Chinese consumers.

During the October-December quarter, Hyundai's revenue amounted to 24.5 trillion won (23.1 billion U.S. dollars), slightly down 0.2 percent from the same period a year ago.

Operating profit plunged 24.1 percent over the year to 775.2 billion won (731 million U.S. dollars) in the December quarter.

The ratio of operating profit to revenue dipped to 3.2 percent in the fourth quarter, falling below 4 percent in seven years.

(ASIA PACIFIC DAILY)