March 8, 2021

Hyundai Motor’s net profit falls 42.1% due to coronavirus



The net profit of the largest South Korean vehicle manufacturer, Hyundai Motor, fell 42.1% year-on-year in the first quarter of the year, to 552.68 billion won (about 416 million euros / 449 million dollars), due to coronavirus effects.

This amount also represents a decrease of 28.4% compared to what the company pocketed in the October-December period.

Gross operating profit (ebitda) totaled 724 billion won (545 million euros / $ 588 million), down 40.5% year-on-year, the company reported today.

In contrast, Hyundai’s operating profit increased 4.7% compared to the same period in 2019, to 863,780 million won (651 million euros / 702 million dollars), while billing 5.6% year-on-year more , to add 25.32 trillion won (19.090 million euros / 20.592 million dollars).

However, from one quarter to the next, sales revenue did clearly reflect the effects of the pandemic, as the company billed 9% more between October and December 2019.

And is that in the first three months of the year Hyundai sold 904,746 vehicles, 11% less than in the last quarter of the year.

The drop in demand in the first quarter was seen above all in China (it sold 51% less), where it is believed that the new coronavirus originated and confinements were first activated.

The increase in sales between January and March in North America (17.2% more year-on-year), its main market, contributed to alleviating the blow.

However, the slump in demand, which is already widespread around the world, has led the company to announce today that it will stop operations in most of its seven national plants from April 30 to May 5.

Its production had already been affected at the start of the pandemic, when Hyundai temporarily froze activity at several of its South Korean plants due to a lack of components produced in China.

In turn, the spread of the virus has forced it to stop production at some of its 10 factories abroad (it currently keeps its facilities in the US, India and Brazil closed due to the pandemic).

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