October 26, 2020

Hyundai Motor swings to net loss in third quarter as costs of engine issues weigh


Hyundai also on Monday said it swung to an operating loss of 314 billion won. Revenue rose 2.3% on year to 27.6 trillion won.

SEOUL : South Korea'sHyundai Motor Co said on Monday it swung to a net loss in the July-September quarter, missing analysts' estimates by a large margin as a charge related to engine issues weighed on 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) for the third quarter, far below the 1 trillion won profit average of 12 analyst estimates complied by Refinitiv.

Hyundai and Kia last week said their third-quarter earnings would reflect quality-related costs of a combined 3.36 trillion won, of which Hyundai accounted for 2.1 trillion won and Kia for 1.26 trillion won.

Another $3 billion of provisions related to engine issues brought their total hit from a series of years-long quality problems to nearly $5 billion.

Hyundai and Kia have recalled vehicles over defects that increase the risk of stalling and engine fires. The pair have been investigated by U.S. authorities for the nature of those recalls.

Hyundai also on Monday said it swung to an operating loss of 314 billion won. Revenue rose 2.3% on year to 27.6 trillion won.

'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.

Hyundai shares were up as much as 4.2% after the results versus a 0.3% fall in the broader market KOSPI as of 0516 GMT.

auto.economictimes


Categories : auto

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