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MarketScreener Homepage  >  Equities  >  Korea Stock Exchange  >  Hyundai Motor Company    A005380   KR7005380001

HYUNDAI MOTOR COMPANY

(A005380)
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Hyundai Motor swings to quarterly loss as engine issues batter earnings

10/26/2020 | 12:21am EST

* Hyundai swings to net loss in Q3 as quality costs weigh

* Firm apologises for having repeated quality issues

* Shares rally on firm sales performance

SEOUL, Oct 26 (Reuters) - South Korea's Hyundai Motor Co said on Monday it swung to a net loss for July-September, missing market estimates by a wide margin, as costs related to engine quality issues and recalls smashed what would otherwise have been strong earnings.

Hyundai, the world's fifth-biggest automaker when combined with affiliate Kia Motors Corp, reported a net loss of 336 billion won ($297.72 million). The average of 12 analyst estimates complied by Refinitiv was 1.2 trillion won in profit.

The automaker said it booked 2.1 trillion won to cover charges related to engine defects that increased the risk of stalling and fire. The years-long quality problems have cost Hyundai and Kia nearly $5 billion and left the pair subject to a probe by U.S. authorities over the manner of their recalls.

"Third-quarter results reflect engine-related provision expenses as the company took preemptive measures to ensure customer safety and cover any possible future increase in quality-related expenses," Hyundai said in a statement.

"We sincerely apologise to our shareholders and investors for having repeated quality cost issues over three quarters since 2018," an executive told an earnings briefing.

Operating loss for the third quarter was 314 billion won. Excluding quality costs, the figure would have been 1.8 trillion won profit. Revenue rose 2.3% on year to 27.6 trillion won.

Analysts said the operating loss was not as deep as expected as Hyundai enjoyed firm sales in the quarter backed by increased demand in the United States and emerging markets such as India.

Its stock rose as much as 4.2% after the announcement versus a 0.3% fall in the benchmark KOSPI in afternoon trade.

($1 = 1,133.4500 won) (Reporting by Heekyong Yang and Joyce Lee; Additional reporting by Joori Roh; Editing by Christopher Cushing and Kim Coghill)


© Reuters 2020
Stocks mentioned in the article
ChangeLast1st jan.
HYUNDAI CORPORATION -0.33% 15200 End-of-day quote.-15.08%
HYUNDAI MOTOR COMPANY -0.28% 179000 End-of-day quote.48.55%
KIA MOTORS CORPORATION -1.02% 58400 End-of-day quote.31.83%
KOSPI COMPOSITE INDEX 0.43% 2630.85 Real-time Quote.18.21%
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Financials
Sales 2020 104 088 B 94,2 B 94,2 B
Net income 2020 1 874 B 1,70 B 1,70 B
Net Debt 2020 57 035 B 51,6 B 51,6 B
P/E ratio 2020 24,5x
Yield 2020 2,08%
Capitalization 38 176 B 34 492 M 34 549 M
EV / Sales 2020 367x
EV / Sales 2021 331x
Nbr of Employees -
Free-Float 71,0%
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Technical analysis trends HYUNDAI MOTOR COMPANY
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Income Statement Evolution
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Mean consensus BUY
Number of Analysts 26
Average target price 225 615,38 KRW
Last Close Price 181 000,00 KRW
Spread / Highest target 43,6%
Spread / Average Target 24,6%
Spread / Lowest Target -22,7%
EPS Revisions
Managers
NameTitle
Mong-Koo Chung Co-Chief Executive Officer & Honorary Chairman
Won-Hui Lee Co-President, Co-CEO & Director
Eui-Sun Chung Chairman
José Munoz Global Chief Operating Officer
Byeong-Cheol Choi Chief Financial Officer
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