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Hyundai’s profit jumps 16% despite halting production in Russia

EVs, luxury models help South Korean automaker shrug off Ukraine war impact

Hyundai's profit jumps 16% despite halting production in Russia

Hyundai Motor said on Monday that its operating profit jumped more than 16% in the first quarter, year-on-year, as sales of electric vehicle models and the luxury Genesis helped it shrug off the impact of the war in Ukraine and suspended production in Russia.

The South Korean automaker, the world’s fifth-largest together with smaller affiliate Kia, said that its operating profit reached 1.9 trillion won ($1.5 billion) in the January to March period, up 16.4% from the same period last year. Hyundai’s revenue climbed 10.6% to 30.3 trillion won, while its net profit increased 16.8% to 1.8 trillion won.

Hyundai Motor and Kia, along with auto parts manufacturer Hyundai Mobis and Hyundai Wia, which produces auto parts, machine tools and defense products, are among companies that make up the Hyundai Motor Group.

“Robust sales of SUV and Genesis luxury models, declining incentives, and [a] favorable foreign exchange environment helped lift revenue in the first quarter despite the slowdown in sales volume amid an adverse economic environment,” Hyundai Motor said in a statement.

Hyundai shares closed up 1.1% at 182,000 won on Monday thanks to the better-than-expected earnings. The market consensus for the first quarter was an operating profit of 1.6 trillion won and revenue of 29.8 trillion won, according to FnGuide, a corporate analysis specialist.

The earnings results come after Hyundai suspended production lines in St. Petersburg, Russia, last month, following international sanctions over the country’s invasion of Ukraine. Hyundai said that it plans to expand production in other regions to offset the loss.

“We will transfer auto parts for Russia to other regions to gear up for production in those places,” Seo Gang-hyun, a Hyundai vice president, said on a conference call to discuss the company’s latest results.

Hyundai Motor Group on Monday said that Hyundai Motor, Kia, Hyundai Mobis and Hyundai Wia joined Climate Group’s RE100, a global initiative in which top corporations commit to moving toward 100% renewable electricity.

“The group is considering various ways to procure renewable energy, such as self-production through solar panels, power purchase agreements with wind and solar energy producers, as well as through Korea Electric Power Corporation’s Green Premium program,” the group said in a statement.

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