South Korea’s Hyundai Motor Group saw the combined operating profit of its 11 affiliates more than double in the third quarter as Chairman Chung Euisun entered his fourth year at the helm of the conglomerate with great success.
Data from the Financial Supervisory Service show the group’s 11 listed companies that have reported their quarterly results posted a combined 8.36 trillion won ($6.22 billion) in operating profit in the July-September quarter, up 109% from the year-earlier period.
Their combined sales reached 104.45 trillion won, up 7.6% from a year ago.
Both sales and operating profit were at their all-time high for the third quarter.
For the first nine months of this year, the 11 affiliates’ operating profit stood at 25.79 trillion won, surpassing their record full-year profit of 23.57 trillion won in 2022.
The conglomerate’s stellar performance was led by its two automaking units – Hyundai Motor Co. and Kia Corp. – which took Korea’s top two spots in terms of operating profit.
Kia's EV9 at New York Auto Show 2023 Last week, Hyundai, Korea’s top automaker, posted its highest-ever quarterly operating profit, driven by robust sales of pricey cars under the Genesis brand, sport utility vehicles and eco-friendly cars.
HYUNDAI MOTOR, KIA OUTRIVAL SAMSUNG
With an operating profit of 3.82 trillion won on a consolidated basis, Hyundai became Korea’s highest earner, pushing past the longest-reigning champion, Samsung Electronics Co., for the third consecutive quarter.
Hyundai’s sister firm Kia said last week its third-quarter operating profit tripled to 2.87 trillion won, also beating Samsung’s 2.4 trillion won profit.
The two automakers’ sales accounted for 63.7% of Hyundai Motor Group’s entire sales in the third quarter while the duo’s operating profit accounted for 80% of the group’s profit.
Analysts said the carmakers’ performance, led by their latest electric models such as Hyundai’s IONIQ5 and IONIQ6 and Kia’s EV6 and EV9, has elevated the duo’s status among global top-tier electric vehicle brands.
OTHER UNITS PERFORM WELL
The automotive group’s other businesses, such as construction, defense and logistics, have also performed well.
Last month, Hyundai Engineering & Construction Co. (Hyundai E&C) and Hyundai Engineering Co., clinched a 3.1 trillion won deal from Saudi Arabian Oil Co. (Aramco) to build phase 2 of the Saudi Jafurah gas processing facility project.
In June, Hyundai E&C was named to lead Saudi Aramco’s 6.5 trillion won Amiral Project to build a large-scale petrochemical complex. The deal marks the largest Saudi project any Korean firm has ever won.
Hyundai E&C is working on 23 construction projects in five Middle Eastern countries worth a combined 26.3 trillion won, including the Amiral Project.
Hyundai Rotem Co., which won a deal to export 180 units of K-2 battle tanks to Poland last year, is in talks to sell another batch of 820 tanks to the country.
Hyundai Motor Chairman Chung Euisun shakes hands with Hyundai E&C workers in Saudia Arabia's Neom City construction site in October CHUNG’S LEADERSHIP
Industry officials said Group Chairman Chung, who took office in October 2020, has been diversifying the conglomerate’s business portfolio, contributing to its strong performance over the past three years.
Global rating agencies Moody’s and Fitch raised their credit views on Hyundai Motor, Kia and Hyundai Mobis this year and a further rating upgrade is likely given the companies’ focus on new growth businesses, including autonomous driving, robotics and advanced air mobility, as well as improving sales and profits at their affiliates, analysts said.
Hyundai Steel Co., which last year won a deal to supply heavy plates for the expansion work of the natural gas liquid plant in Saudi Arabia's Ju’aymah oil field, recently delivered them.
Hyundai's Chung (right) visits Hyundai E&C's construction site in Saudia Arabia's Neom City The steelmaker also supplies automotive steel plates to global carmakers such as Stellantis, Ford and Volkswagen. Hyundai Glovis Co. signed a five-year car shipping contract worth 500 billion won with Volkswagen in November.
Hyundai Mobis secured $8.57 billion in parts orders from global automakers, including Volkswagen, in the first nine months of the year, surpassing its full-year overseas target of $5.36 billion.
Hyundai Wia Co. has signed auto parts deals worth 1 trillion won with global carmakers while Hyundai Transys Co. has won a 700 billion deal to supply automotive transmissions to Stellantis.
Write to Il-Gue Kim and Sungsu Bae at black0419@hankyung.com In-Soo Nam edited this article.
