Hyundai's Profit Grows 7.8% Amid Sales Challenges in 2024

Hyundai's Profit Growth in a Challenging Market

Hyundai Motor Company (OTC: HYMLF) achieved a remarkable net profit of KRW 13.23 trillion in 2024, marking a solid 7.8% growth from the previous year. This achievement is particularly noteworthy given a slight decrease in global vehicle sales, which fell by 1.8% to 4.14 million units.

Revenue Drivers Amidst Sales Declines

The increase in net profit can be attributed to Hyundai's strategic cost-cutting measures, streamlined sales operations, and an enhanced product lineup tailored to better align with customer preferences across various markets.

Hyundai's annual revenue also witnessed a significant rise of 7.7%, reaching KRW 175.2 trillion. This growth was largely fueled by a robust demand for electrified vehicles and a well-diversified product portfolio that stands out in a competitive landscape.

Electrified Vehicle Sales Surge

In 2024, Hyundai sold an impressive 757,191 electrified models, representing an 8.9% increase from 2023. Breaking it down, electric vehicle sales hit 218,500 units, while hybrid sales totaled 496,780 units. This surge reflects Hyundai's successful strategy in tapping into the growing hybrid vehicle market, particularly in North America.

Challenges Facing Operating Profit

However, it's important to note that Hyundai encountered challenges with operating profit, which decreased by 5.9% to KRW 14.24 trillion, resulting in an operating profit margin of 8.1%. The decline was influenced by higher warranty provisions, a weakening Korean won, and increased customer incentives.

These challenges were particularly apparent in the fourth quarter, where operating profit fell sharply by 17.2% year-on-year to KRW 2.82 trillion.

Quarterly Performance Highlights

Despite operational hurdles, Hyundai recorded a quarterly net profit of KRW 2.47 trillion, a 12.3% increase compared to the same time in 2023. Revenue surged by 11.9%, hitting KRW 46.62 trillion during the same quarter.

Looking at the broader picture, Hyundai's domestic vehicle sales experienced a decline of 7.5% in 2024, while international sales slightly decreased by 0.5%. Supply chain disruptions, influenced by factors like heavy snowfall and a slowdown in demand, played a significant role in these outcomes.

Commitment to Shareholders and Future Outlook

Hyundai remains committed to its shareholders, announcing a year-end dividend of KRW 6,000 per common share, culminating in a total annual payout of KRW 12,000 per share, a notable increase of 5.3% from 2023.

The South Korean automotive giant is optimistic about the future, forecasting revenue growth of 3-4% for 2025. Hyundai aims to achieve an operating profit margin between 7-8% along with a projected increase in global vehicle sales to 4.17 million units. To support these goals, the company has earmarked KRW 16.9 trillion for further investments across essential areas, including capital expenditures, research and development, and strategic initiatives.

Frequently Asked Questions

What contributed to Hyundai's profit growth in 2024?

Hyundai's profit growth was largely attributed to cost-cutting measures, streamlined processes, and strong demand for electrified vehicles.

How did vehicle sales perform for Hyundai in 2024?

Hyundai experienced a 1.8% decline in global vehicle sales, totaling 4.14 million units sold.

What is the forecast for Hyundai in 2025?

Hyundai predicts a revenue growth of 3-4% for 2025, aiming for a global vehicle sales target of 4.17 million units.

What was Hyundai's annual revenue in 2024?

Hyundai's annual revenue for 2024 was KRW 175.2 trillion, reflecting a 7.7% increase from the previous year.

Was there an increase in dividends for Hyundai shareholders?

Yes, Hyundai announced a total dividend payout of KRW 12,000 per share for 2024, a 5.3% increase from 2023.

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