Hyundai Q3 profit slides 10 per cent

Hyundai Motor's third-quarter profit fell to its lowest level in almost seven years, well below forecasts, due to a strike that dented production and weak demand in emerging markets. Sales slid 3.1 percent to 12.7 trillion won on year.

Operating profit at POSCO, Korea's largest steelmaker, has surpassed the 1 trillion-won mark for the first time in four years thanks in part to a recovery in steel prices in China.

Hyundai is widely expected to miss its full-year sales target after its weak performance so far.

The results came a day after Hyundai said about 1000 executives will take a 10 per cent pay cut to reflect the severity of the slump.

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The logo of Hyundai Motor Co.is displayed at the automaker's showroom in Seoul, South Korea, Wednesday, Oct. 26, 2016.

The automaker replaced its heads of both its operations in China and South Korea during October after losses in market share in both of its key markets. Net income fell for a 11th consecutive quarter, also missing analysts estimates. Both revenue and operating profits have improved substantially - revenue grew 14.7 percent while operating profit advanced 20.8 percent - compared to the previous year. Kia expects demand from Russian Federation and other emerging markets to recover in the latter half next year, pinning hopes on subcompacts such as Picanto (known as Morning at home) and Rio (known as Pride at home) to be introduced in Russian Federation early next year.

The automaker's domestic factories were hit by sporadic strike action from July to September in what was its worst-ever labour dispute. Kia Motors said labor strike-induced production disruption and stronger Korean currency largely put a dent in its profitability despite release of new cars including the K7 and expanded sales of recreational vehicles. Hyundai shares were down almost 2 percent after the earnings announcement, versus the market's 1.5 percent fall, before trimming losses.

  • Darren Santiago