Hyundai and Kia Likely to Report Record Earnings for 2024
Click to start listening
Synopsis
Hyundai Motor and Kia, South Korea's premier automakers, are set to disclose their annual earnings next week, with expectations of maintaining a record-breaking performance streak. Analysts predict positive sales but a slight dip in operating profits.
Key Takeaways
- Hyundai expected to report 173.1 trillion won in sales.
- Kia projected to exceed 100 trillion won in sales for the first time.
- Combined sales for both companies to reach approximately 279.96 trillion won.
- Currency fluctuations and warranty provisions may impact profits.
- Analyst expresses optimism for 2025 performance.
Seoul, Jan 16 (NationPress) Hyundai Motor and Kia, the leading automakers of South Korea, are anticipated to unveil their yearly earnings results next week, creating buzz regarding their potential to maintain a trend of record-breaking achievements, industry analysts indicated on Thursday.
An evaluation of securities industry projections by Yonhap Infomax over the last three months suggests that Hyundai Motor is likely to announce sales of 173.1 trillion won ($118.9 billion) and an operating profit of 14.8 trillion won for 2024.
While the sales figure reflects a 6.4 percent increase, the operating profit is expected to dip by 1.9 percent.
Kia is projected to report sales of 106.8 trillion won and an operating profit of 12.8 trillion won, showing year-on-year growth of 7.1 percent and 10.2 percent, respectively.
If these predictions hold true, Kia will achieve a historic milestone by exceeding 100 trillion won in sales for the first time.
Combined, both companies are expected to announce total sales of 279.96 trillion won and an operating profit of 27.64 trillion won, surpassing their prior combined records of 262.47 trillion won and 26.73 trillion won set in 2023.
Nonetheless, various factors such as currency volatility and quality-related expenses could influence the ultimate outcomes.
The significant depreciation of the South Korean won against the U.S. dollar at the end of last year positively impacted sales and operating profits but also resulted in a rise in provisions for sales warranties.
These sales warranty provisions negatively affect corporate earnings by diminishing profit and escalating expenses when warranty claims arise.
In the third quarter, Hyundai Motor and Kia set aside nearly 1 trillion won for extended warranty provisions.
“Although the increased provisions for sales warranties contribute to weaker performance, the robust partnerships and competitive advantages of Hyundai and Kia in the changing market landscape offer hope for improved results in 2025,” stated Jang Moon-su, an analyst at Hyundai Motor Securities.
