Hyundai Mobis Q1 net profit falls 14 pc on weaker vehicle demand

Seoul, April 24
Hyundai Mobis, South Korea's leading auto parts maker, said on Friday its first-quarter net profit fell 14 per cent from a year earlier as weaker global vehicle demand weighed on earnings.

Net profit for the three months ending in March fell to 883.05 billion won ($596 million) from 1.03 trillion won a year earlier, the company said in a regulatory filing.

"Rising external uncertainties linked to prolonged tensions in the Middle East dampened vehicle sales and parts demand," a company official said, reports Yonhap news agency.

Operating profit rose 3.3 percent to 802.65 billion won from 776.68 billion won during the same period on increased supply of high-end electric components to global carmakers. Sales climbed 5.5 percent to 15.56 trillion won from 14.75 trillion won.

Despite ongoing uncertainties, Hyundai Mobis said it plans to invest 2.1 trillion won in research and development (R&D) this year to strengthen its competitiveness in future mobility solutions.

The planned R&D spending marks a 12 percent increase from a year earlier.

Hyundai Mobis generates about 90 percent of its parts sales from affiliates Hyundai Motor Co. and Kia Corp. The company aims to raise the share of overseas parts sales from 10 percent to 40 percent by 2033. It also holds a 21.86 percent stake in Hyundai Motor.

Earlier, Hyundai Motor said its first-quarter net profit dropped 23.6 percent on-year amid business environment headwinds involving U.S. tariffs and rising raw material costs.

Net profit for the first three months of this year totalled 2.58 trillion won ($1.7 billion), down from 3.38 trillion won a year ago, the company said in a regulatory filing.

Operating income for the January-March period fell 30.8 percent on-year to 2.51 trillion won, but sales increased 3.4 percent to 45.93 trillion won, reports Yonhap news agency.

Despite the drop in profits, the figure exceeded market expectations. The average estimate of net profit by analysts stood at 2.43 trillion won, according to a survey by Yonhap Infomax, the financial data firm of Yonhap News Agency.

The company attributed the effects of U.S. auto tariffs, rising raw material costs and increased investment to the decline in profits. Tariff-related costs amounted to 860 billion won during the quarter, according to Hyundai.

na/