Hyundai Motor Co., the world's seventh-biggest automaker by capacity, said first-half profit tripled to a record as it sold more luxury cars in Korea and expanded exports, especially to North America.
Net income in the six months to June rose to 310.4 billion won ($278 million) from 110.2 billion won in the same period last year. Affiliate Kia Motors Corp. returned to a profit of 82.6 billion won from a 33.8 billion won loss, lifting Korea's biggest automaker to the best first-half earnings in its 33-year history.
"It sold more luxurious and profitable vehicles during this period, boosting earnings,'' said Cho Yong Jun, an analyst at Shinyoung Securities Co., who has a long-term "buy'' recommendation on the stock.
Korea's rapid economic growth, clocking 12.8 percent in the first quarter of the year, prompted Koreans to opt for pricier cars. The profit spurt comes as DaimlerChrysler AG agreed in June to buy a tenth of Hyundai Motor and as creditors are demanding that it be separated from the Hyundai Group, steps that will help the company focus more on its main business.
"Earnings at Hyundai Motor were in line with my expectations, while those at Kia were a bit lower than expected,'' said Mark Barclay, an auto analyst at Samsung Securities Co., who has a "buy'' recommendation on Hyundai Motor and a "market perform'' for Kia. "Hyundai Motor could maintain its upward momentum in the second half of this year.''
Hyundai Motor shares rose 3.5 percent to 14,700 won, while Kia shares rose 2.6 percent to 7,070 won. Hyundai Motor stock has dropped 18 percent so far this year, compared with a 0.4 percent drop in Kia shares. During the period, the benchmark Kospi index has fallen 35 percent. Hyundai Motor said sales rose 40 percent on year in the January to June period to 8.47 trillion won. Sales at Kia rose 69 percent to 4.8 trillion won during this period. Reuters
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