Hyundai and Kia likely to reveal record earnings in 2024: Report
Hyundai Motor and Kia, two of South Korea’s leading automakers, are gearing up to unveil their annual earnings reports next week. The industry is abuzz with anticipation as stakeholders eagerly await to see if these companies will continue their streak of unprecedented success.
Analysts have been closely monitoring the projections to get a better sense of what to expect. According to Yonhap Infomax’s analysis of securities industry forecasts for the past quarter, Hyundai Motor is predicted to achieve sales of 173.1 trillion won ($118.9 billion) and an operating profit of 14.8 trillion won for the year 2024. While sales are expected to rise by 6.4 percent, operating profit is anticipated to dip slightly by 1.9 percent.
On the other hand, Kia is forecasted to report sales of 106.8 trillion won and an operating profit of 12.8 trillion won, marking a growth of 7.1 percent and 10.2 percent respectively from the previous year. If these estimates come to fruition, Kia will achieve a significant milestone by surpassing 100 trillion won in sales for the first time in its history.
Combined, Hyundai and Kia are projected to post total sales of 279.96 trillion won and an operating profit of 27.64 trillion won. These figures would exceed their previous records of 262.47 trillion won in sales and 26.73 trillion won in operating profit, which were achieved in 2023.
Despite these optimistic projections, there are potential variables that could influence the final outcomes, such as currency fluctuations and quality-related expenses. While the recent depreciation of the South Korean won against the U.S. dollar may have positively impacted sales and operating profits, it has also led to an increase in provisions for sales warranties. This allocation affects corporate earnings by reducing profits and increasing expenses when warranty claims are filed.
Jang Moon-su, an analyst at Hyundai Motor Securities, acknowledged that the rise in sales warranty provisions might dampen performance. However, he remains hopeful about better results in 2025 due to Hyundai and Kia’s strong partnerships and competitive advantages in the evolving market landscape.
As the unveiling of these companies’ earnings reports draws near, industry insiders are anticipating whether Hyundai and Kia will maintain their exceptional performance or face challenges due to various economic factors. The automotive industry is watching closely to see how these top South Korean automakers will fare in the upcoming year.
