Why Did Hyundai Mobis Experience a 6.3% Drop in Q2 Net Profit?
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Synopsis
Hyundai Mobis reports a decline in its second-quarter net profit due to reduced equity gains from affiliates. Despite the drop, operating profit and sales have shown substantial growth. The company's strategy aims to diversify its revenue sources as it faces challenges from U.S. tariffs.
Key Takeaways
- 6.3% decline in net profit due to reduced equity gains.
- 36.8% increase in operating profit highlights strong performance.
- Sales rose 8.7%, showcasing resilience.
- Future focus on expanding overseas sales.
- Challenge of U.S. tariffs remains significant.
Seoul, July 25 (NationPress) Hyundai Mobis, a prominent player in South Korea's auto parts industry, announced on Friday that its net profit for the second quarter experienced a 6.3 percent decline compared to the same period last year, primarily due to diminished equity gains from its affiliates.
The company's net profit for the quarter ending in June slipped to 934.4 billion won (approximately $680.8 million), down from 997.6 billion won recorded a year prior, as detailed in a regulatory announcement, according to reports from Yonhap news agency.
A spokesperson for the company noted, “A significant equity gain from Hyundai Motor Co. was recorded in the second quarter of the previous year, attributed to the carmaker's robust earnings.”
Meanwhile, Hyundai Motor reported a 22 percent year-on-year drop in its second-quarter net profit, totaling 3.25 trillion won, largely impacted by the new U.S. import tariffs that commenced in April.
As of April 2, the U.S. government has been implementing 25 percent tariffs on all imported vehicles.
Hyundai Mobis maintains a 21.86 percent ownership stake in Hyundai Motor.
However, the company's operating profit surged 36.8 percent year-on-year, reaching 870 billion won in the second quarter, up from 636.1 billion won, while overall sales climbed 8.7 percent to 15.93 trillion won, compared to 14.65 trillion won the previous year.
The company attributed the enhanced operating results to a superior product mix, driven by strong sales of high-end electronic components, coupled with a weaker won against the U.S. dollar, which increased the repatriated value of overseas after-sales component revenue.
In the first half of the year, net income increased by 5.7 percent to 1.96 trillion won, rising from 1.86 trillion won in the same period last year.
During this timeframe, Hyundai Mobis secured orders worth $2.12 billion from global clients, excluding Hyundai Motor Co. and Kia Corp., achieving 30 percent of its annual target of $7.45 billion amidst escalating uncertainty regarding U.S. tariff policies.
The company currently generates 90 percent of its overall parts sales from its two affiliated automakers and aims to boost the share of its international parts sales from 10 percent to 40 percent by 2033.
Point of View
Hyundai Mobis's financial results reflect broader economic trends and challenges facing the automotive industry, particularly in light of U.S. trade policies. The company's ability to adapt and innovate will be crucial in maintaining its leadership position in the global market.
NationPress
26/07/2025
Frequently Asked Questions
What contributed to the decline in Hyundai Mobis's net profit?
The decline was primarily due to reduced equity gains from affiliates, particularly Hyundai Motor Co., which had a strong performance in the previous year.
How did Hyundai Mobis's operating profit perform?
Hyundai Mobis reported a 36.8 percent increase in operating profit for the second quarter, reaching 870 billion won.
What are the company's future plans regarding sales?
Hyundai Mobis aims to increase its share of overseas parts sales from 10 percent to 40 percent by 2033.
What impact do U.S. tariffs have on Hyundai Mobis?
The newly imposed U.S. tariffs have negatively affected Hyundai Motor's earnings, which in turn impacts Hyundai Mobis's equity gains.
What was the total sales figure for Hyundai Mobis in Q2?
In the second quarter, Hyundai Mobis's sales rose by 8.7 percent to reach 15.93 trillion won.
