Hyundai Motor to tighten belt

Hyundai Motor to tighten belt
Hyundai Motor Group Chairman Chung Mong-koo speaks at the company's new year ceremony in Seoul January 2, 2015.

Hyundai Motor, the nation's largest automaker, said on Thursday that although the company had achieved growth in car sales and revenue last year, its profits dropped to a four-year low.

The carmaker said it sold a total of 4.96 million vehicles last year, up 4.8 per cent from 2013.

It posted 89.3 trillion won ($82.2 billion) in sales, a 2.2 per cent rise from the previous year.

Despite higher sales, its operating profit fell 9.2 per cent to 7.55 trillion won ($6.96 billion) in 2014 over 2013.

This was its lowest annual profit since 2010, when the company's profit fell to 5.9 trillion won due to the global economic downturn.

"The stronger won against the dollar and the Japanese yen last year reduced the value of its overseas sales,'' the company said in a conference call.

Hyundai Motor's profitability also fell for the second consecutive year.

Its profit margin fell to 9.5 per cent in 2013 and 8.5 per cent in 2014.

"To improve profitability, the company will improve productivity and tighten its belt for cost control this year, while driving the sales of new cars,'' company officials said.

In the fourth quarter last year, new car launches and a weaker won boosted the automaker's revenue and operating profit 10.8 per cent to 23.6 trillion won and 13.8 per cent to 1.88 trillion won, respectively, from the previous year.

Regarding the outlook for business performance in 2015, Hyundai Motor said the global car market would continue to be surrounded by a number of uncertainties.

The automaker added it would face fiercer competition not only at home but also overseas.

Regarding the 2015 sales targets, the company said it hopes to sell 690,000 units at home and 4.36 million units overseas.

"This is one of the reasons why the company aims to improve its competitiveness for sustainable growth, while continuing to improve the quality of its products and satisfaction of its customers,'' it said.

Meanwhile, Hyundai Motor unveiled a detailed plan to raise dividend payments in an effort to lift the discounted share price.

"To improve shareholders' value, top management decided to raise dividend payouts to 3,000 won per share from 1,950 won,'' the company said.

The hike in share payout was expected as the automaker repeatedly said last year that it would adopt shareholder-friendly policies.

Investors have pushed the automaker to take the move, complaining that its dividend payments are extremely low.

(jyseo@heraldcorp.com)

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