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Hyundai Motor's Q1 operating profit falls to four-year low


SEOUL, (Xinhua) -- Hyundai Motor, South Korea's largest car maker, saw its first-quarter operating profit decline to the lowest in more than four years due to the local currency's ascent to emerging market currencies, a regulatory filing showed Thursday.

Operating profit tumbled 18.1 percent from a year earlier to 1. 59 trillion won (1.47 billion U.S. dollars) in the three months ending March 31.

The profit missed market forecast of about 1.66 trillion won, marking the lowest since the fourth quarter of 2010 when it recorded 1.24 trillion won.

Revenue retreated 3.3 percent from a year earlier to 20.94 trillion won in the first quarter, and net income fell 2.2 percent to 1.98 trillion won during the quarter.

Hyundai's global auto sales posted 1,182,834 units in the first quarter, down 3.6 percent from a year earlier.

Domestic car sales dipped 3.7 percent to 154,802 vehicles in the first quarter, with auto sales in overseas markets sliding 3.6 percent to 1,028,032 units.

The lackluster profits came as the South Korean currency appreciated to emerging market currencies, especially to the European single currency and the Russian ruble, leading to a fall in profits earned from overseas car sales.

The local currency depreciated slightly to the U.S. dollar in the first quarter.

A rise in fixed costs was brought on by the lower rate of operating capacity, hampering the profit after excluding production costs.

By region, factories in the United States saw revenue fall 5.2 percent in the first quarter, with sales in China sliding 8.1 percent. The figure in Russia tumbled 41.2 percent on sharp fall in ruble, but sales in Turkey grew 27.7 percent.

The company expected the profit to rebound in the second quarter given positive factors, including the expected rise in operating capacity, auto sales growth in advanced economies and the scheduled launch of new models.

Meanwhile, the company said it is actively reviewing the construction of its second factory in the United States as car demand there is expected to increase from 16.8 million this year to 17.5 million two years later.

Due to the limited manufacturing capacity in the U.S., Hyundai would depend more on cars produced in South Korean factories this year, the company said.


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