Hyundai Motor Co., South Korea's largest automaker, on Thursday said fourth-quarter net profit rose 71 percent mostly on strong sales of vehicles made at its overseas plants. Hyundai Motor earned 656.9 billion won (US$678.1 million; 553.5 million euros) in the three months ended Dec. 31, the company said in a statement. Sales rose 7.7 percent to 8.12 trillion won (US$8.38 billion; 6.84 billion euros).
The profit result was better than expected. The average estimate of 11 analysts surveyed by Dow Jones Newswires forecast that the company would post a net profit of 566 billion won (US$584 million; 477 million euros). Sales matched expectations.
The strong performance came "mostly from profit gains from overseas" in India, China, Turkey and the United States, said Hyundai spokesman Jake Jang. Profit was also bolstered by gains at subsidiaries such as Hyundai Capital and Hyundai Card, Jang said. For all of 2005, Hyundai recorded net profit of 2.32 trillion won (US$2.39 billion; 1.95 billion euros), up 33 percent from 2004, the company said. Sales decreased 0.3 percent to 27.4 trillion won (US$28.3 billion; 23.1 billion euros) due to the strengthening Korean won.
Hyundai announced earlier this month it sold a record 2.53 million vehicles worldwide last year, up 11 percent. The carmaker sold 570,814 vehicles in South Korea, for a gain of 3.7 percent. Exports rose 13.3 percent in 2005 to a record-high 1.96 million.
Hyundai has been pursuing aggressive overseas expansion, with its latest foreign factory opening in May 2005 in Montgomery, Alabama in the United States. It has increased production capacity in China, India and Turkey and plans to introduce new models at the Alabama plant.
Sales in 2005 at its Beijing Hyundai Motor joint venture rose 62 percent to 233,668 vehicles, with growth coming mostly on the back of the Elantra, the mainstay of Beijing's taxi fleet. Seung-sub Eum, an auto analyst at Meritz Securities in Seoul, said fourth-quarter net profit was also bolstered by an increase in domestic sales following a strike at the company in the third quarter.
The 12-day walkout ended with Hyundai offering salary and bonus increases and work hour reductions. Hyundai's union has gone on strike every year but one since 1987 and the strikes are seen here as part of the annual negotiating process at the company.
"Fourth-quarter domestic sales were really good," said Hagju Kim, an analyst at Samsung Securities, who said Hyundai benefited as consumers made purchases before the government terminated an excise tax reduction on cars on January 1.
Shares in Hyundai Motor, which released earnings results after the stock market closed, fell 1.9 percent to 87,400 won US$90; 74 euros), reports the AP.
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