South Korea’s top auto parts maker Hyundai Mobis Co. posted a 36.8% year-on-year rise in second-quarter operating profit, buoyed by a strategic shift toward high-margin components and a ramp-up in its electrification initiative, even as global demand uncertainties and tariff pressures cloud the broader automotive landscape.
The auto parts affiliate of Hyundai Motor Co. said in a regulatory filing on Friday that it recorded 870 billion won ($670 million) in operating profit for the three months ended June, while sales revenue rose 8.7% to 15.94 trillion won.
The solid results come amid heightened trade frictions and a softening EV market, which have weighed on several global peers.
Hyundai Mobis' global electrification production facilities PRODUCT MIX IMPROVEMENT, ELECTRIFICATION
Hyundai Mobis credited its performance to product mix improvement, driven by the full-scale operation of its electrification plant in the US and the expanded supply of high-value electronic modules.
A favorable dollar-won exchange rate and global expansion of its aftermarket service parts business also helped lift margins, along with a company-wide effort to tighten cost controls, according to company officials.
“Investments in R&D and new global production hubs over the past few years are now translating into real results,” the company said in a statement.
Hyundai Mobis’ first-half results underscore the momentum: operating profit jumped 39.7% to 1.65 trillion won on revenue of 30.69 trillion won, up 7.6% from a year earlier.
The auto parts supplier, an affiliate of Hyundai Motor Group, is developing next-generation mobility technologies and expanding a broader client base for sustained growth.
Excluding Hyundai Motor and sister firm Kia Corp., Hyundai Mobis secured $2.12 billion in orders from global carmakers in the first half – about 30% of its full-year target of $7.45 billion.
While some projects were delayed amid a weaker EV outlook and tariff-related tensions, Hyundai Mobis said it expects “a significant share of orders” to be concentrated in the second half.
CEO INVESTOR DAY
To bolster investor confidence, the company unveiled a series of shareholder-friendly measures.
Hyundai Mobis CEO Lee Gyu-suk unveils the company's long-term business strategy at the firm's CEO Investor Day 2024 It will raise its interim dividend by 50% to 1,500 won per share and repurchase 110 billion won worth of treasury stock, which it plans to cancel entirely. An additional 700,000 treasury shares it already owns will also be retired.
Hyundai Mobis said it plans to host its 2025 CEO Investor Day on Aug. 27 at the Fairmont Hotel in Seoul.
Chief Executive Lee Gyu-suk will present the company’s long-term strategy, with a focus on growth opportunities in electrification and autonomous driving, and engage directly with shareholders and stakeholders, company officials said.
Write to In-Soo Nam at isnam@hankyung.com Jennifer Nicholson-Breen edited this article.
