Hyundai Motor's profit tumbles on currency's relative strength

Hyundai Motor's second-quarter operating profit tumbled due to the relative strength of the South Korean currency compared with its peers of Japan and other emerging currencies, the company said on Thursday.

Operating profit sank 16.1 percent from a year earlier to 1.75 trillion won (1.5 billion U.S. dollars) in the second quarter. It was roughly in line with market expectations, marking the profit reduction for five straight quarters.

Revenue rose 0.3 percent from a year earlier to 22.82 trillion won in the second quarter, but net profit plunged 24 percent to 1. 79 trillion won.

Global auto sales fell 2.8 percent to 1,232,943 in the cited period as competition got fiercer amid the weakness of the Japanese yen and other emerging currencies.

The South Korean won depreciated to the U.S. dollar, but the yen and the euro weakened more sharply than the won versus the greenback.

Hyundai decided to pay interim dividend worth about 270 billion won, planning to raise the dividend payout ratio to 15 percent in the short term and to as high as 30 percent over the long run.

For the first six months of this year, Hyundai posted an operating profit of 3.34 trillion won on 43.76 trillion won of revenue. Those were falls of 1.4 percent and 17.1 percent each on a yearly basis.

Hyundai sold 2,415,777 vehicles in the first half, down 3.2 percent from a year earlier. Domestic car sales declined 3 percent to 335,364 units, with overseas auto sales falling 3.2 percent to 2,080,413 units.

The company forecast that hard business conditions would continue in the second half due to sluggish growth of the global economy, uncertainties in Europe and the expected interest rate increase in the United States.

Hyundai planned to roll out new models to overcome the difficulties, keeping its auto sales target of 5.05 million units this year