By Kwanwoo Jun
Hyundai Motor Co. swung to a third-quarter net loss as extra recall costs and sluggish car sales put a big dent on the South Korean car maker's quarterly results.
Its net loss was 188.80 billion Korean won ($167.3 million) compared with net profit of KRW460.50 billion in the same quarter a year earlier, the company said Monday. That was below a FactSet consensus forecast for net profit of KRW936.36 billion.
Hyundai attributed the earnings setback to additional provision of KRW2.100 trillion to cover expenses for recalls related to engine defects.
"Excluding the provision, the business performance exceeded market expectations despite the persistently weak global demand caused by the COVID-19 pandemic," it said in a statement.
Third-quarter revenue rose 2.3% compared with the same period a year earlier to KRW27.576 trillion but the company posted an operating loss of KRW313.82 billion compared with a operating profit of KRW378.52 billion a year earlier.
Hyundai Motor's third-quarter global car sales declined 9.6% despite brisk demand in South Korea from new model launches.
Vehicles sales jumped 22% in South Korea but decreased 15% in the rest of the world, the company said.
Uncertainties because of a fresh wave of coronavirus cases and the won's strength against the dollar weighed on its business outlook, it said.
Hyundai Motor's shares were last up 3.3% after the quarterly earnings release.
Write to Kwanwoo Jun at firstname.lastname@example.org
Corrections & Amplifications
This article was corrected at 0725 GMT to reflect that Hyundai Motor posted an operating profit of KRW378.52 billion a year earlier. The original version of this article incorrectly said it was a net profit in the fifth paragraph.
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