(2nd LD) Hyundai Q4 net plunges 41 pct on chip shortage

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SEOUL, Jan. 25 (Yonhap) — South Korea’s Hyundai Motor Co. said Tuesday its fourth-quarter net profit plunged 41 percent from a year earlier as extended chip shortages affected vehicle production and sales.

Net profit for the three months ended in December came to 701.4 billion won (US$585 million) from 1.183 trillion won a year earlier, the company said in a statement.

Continued chip supply shortages will remain a major concern for carmakers until the first half of this year, Hyundai executives and analysts said.

“Chip supply chain problems began to improve in the fourth quarter but will continue to weigh on vehicle production until the first quarter, and recovery is expected from the second quarter,” Seo Gang-hyun, executive vice president in charge of Hyundai’s finance and accounting division, said in the company’s earnings conference call.

Hyundai expected this year’s vehicle sales to reach the level of 2019 on improving chip supplies and new models.

In 2022, Hyundai aims to sell 4.32 million vehicles, 10 percent higher than its sales of 3.89 million units a year ago.

The maker of the Sonata sedan and the Palisade SUV plans to focus on expanding sales of the Genesis brand and SUV models in the United States and environment-friendly cars in Europe.

In the world’s most important U.S. automobile market, Hyundai will gradually launch three fully electric Genesis models — the GV60 SUV, the G80 sedan and the GV70 SUV — this year. It sells the G70, G80, G90 sedans and GV70 and GV80 SUV models under the independent Genesis brand.

“Record-low inventory levels and planned global launches of vehicles built on Hyundai Motor Group’s EV-only electric-global modular platform (E-GMP) will help prop up the bottom line from the third quarter,” Cho Soo-hong, an analyst at NH Investment & Securities Co., said.

E-GMP models include the IONIQ 5 launched last year and the IONIQ 6 sedan and IONIQ 7 SUV set to be released this year and in 2024, respectively.

Helped by an improved product mix and a weak won, however, operating profit jumped 22 percent to 1.529 trillion won in the fourth quarter from 1.254 trillion won a year ago.

Sales rose 6 percent to 31.026 trillion won from 29.243 trillion won during the same period.

For the whole of 2021, net income nearly tripled to 5.693 trillion won from 1.925 trillion won a year ago on increased sales of high-end Genesis and SUV models amid the pandemic.

Full-year operating profit nearly tripled to 6.679 trillion won from 2.394 trillion won a year ago. Sales climbed 13 percent to 117.61 trillion won from 103.99 trillion won during the same period.

Hyundai plans to spend 9.2 trillion won this year mainly for facility investments and research and development activities.

On Tuesday, Hyundai shares fell 1.27 percent to 194,500 won in line with the broader KOSPI’s 2.56 percent loss.

kyongae.choi@yna.co.kr
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