The automaker said the global chip shortage will last until the end of this year or next year, and expects it to take a long time to return to normal.
see photosHyundai reported a net profit of 1.3 trillion won ($1.10 billion) for the July-September quarter.
South Korea’s Hyundai Motor Co. slightly missed analysts’ profit estimates as the global chip crisis dented vehicle shipments and said it expects a return to normal chip supply will take a long time.
Hyundai, which along with affiliated Kia Corp is among the world’s top 10 automakers in terms of sales, reported a net profit of 1.3 trillion won ($1.10 billion) for the July-September quarter.
In the same period a year earlier, there was a loss of 336 billion won when affected by one-time expenses related to engine quality issues and recalls.
The profit was just shy of the average analyst forecast of 1.4 trillion compiled by Refinitiv SmartEstimate.
“Hyundai Motor expects sales growth to slow for the rest of 2021 amid unfavorable business conditions due to unstable supply of semiconductor chips,” Hyundai Motor said in a statement.
The global chip crisis has shut down auto production lines globally and forced automakers to reduce shipment forecasts.
The automaker said the global chip shortage will last until the end of this year or next year, and expects it to take a long time to return to normal.
“Chip shortages will continue in the fourth quarter, but the supply situation will partially improve in the fourth quarter compared to the third quarter,” said Seo Gang Hyun, executive vice president of Hyundai Motor, in a call with analysts.
The global chip crisis, triggered partly by rising demand for laptops and consumer electronics during the pandemic, has shuttered auto production lines globally and forced automakers to reduce shipment forecasts.
Hyundai had earlier said that its annual sales growth could slow in the second half of 2021 due to challenging business conditions, including volatile supplies of automotive chips.
The company said it has cut this year’s capital expenditure by 10% to $8 trillion won to better respond to uncertainties, including the coronavirus pandemic.
It saw this year’s auto-business operating margin profit jump from the previously announced 4%-5% to 4.5%-5.5%, citing strong sales of its high-margin sport-utility vehicles (SUVs) and its premium Genesis cars. modified.
Hyundai cut this year’s capital expenditure spending by 10% to $8 trillion to better respond to uncertainties
“Based on Hyundai’s revision of its operating margin targets, the upcoming fourth quarter results will be the most profitable quarter this year as the company expects chip supply issues to improve,” said Eugene analyst Lee Jae-il. Investor Protections.
Hyundai had turned in its best quarterly profit in nearly six years in the April-June quarter, thanks to its conservative supply chain management that helped it navigate the chip shortage better than other automakers.
But a prolonged crisis forced Hyundai to suspend production in the third quarter.
This month, Hyundai’s global chief operating officer Jose Munoz said the automaker is looking to develop its own chips to reduce dependence on others.
0 notes
Shares of Hyundai Motor were trading up 0.7% after the firm published its earnings results, compared with a 0.8% rise in the broader market KOSPI.
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