Hyundai Motor Q2 profit beats estimates on China, Brazil sales

Hyundai Motor Co., South Korea’s largest carmaker, reported second-quarter profit that beat analysts’ estimates, helped by sales in China and Brazil.

Net income, excluding minority interests, fell to 2.4 trillion won ($2.15 billion) from 2.45 trillion won a year earlier, the Seoul-based company said in a statement Thursday. Profit beat the 2.37 trillion won average of 15 analysts’ estimates compiled by Bloomberg. Revenue increased 5.7 percent to 23.2 trillion won.

Demand for the Elantra Yuedong sedan helped Hyundai’s deliveries rise 32 percent in China last quarter, outpacing industry growth, while the HB20 hatchback led the tripling of sales in Brazil. Emerging markets helped Hyundai counter a slump in Europe, labor disputes in Korea and a weaker yen that is giving Japanese carmakers an edge in the U.S.

“New plants that opened in Brazil and China helped Hyundai,” Lee Sang-hyun, an analyst at NH Investment & Securities Co. said by phone before the earnings announcement. “Strike threats from its union over wage terms and the weaker yen continue to burden the company, but prospects look good toward the end of the year.”

Operating profit, or sales minus the cost of goods sold and administrative expenses, fell 5.2 percent to 2.41 trillion won. That exceeded the 2.35 trillion won average analyst estimate compiled by Bloomberg.

In China, Hyundai sales rose 32 percent in the three months ended June 30, helped by the Elantra Yuedong and Elantra Langdong, according to company data.

The HB20 hatchback, specifically designed for the Brazilian market, has won seven awards in the country since it was unveiled in September, including Car of the Year by auto magazine Autoesporte and 10 other media, according to Hyundai.

Deliveries in Brazil surged more than threefold to 49,156 units last quarter.

Hyundai started production at a new plant in Brazil and the third plant in China last year. (Bloomberg)