Hyundai Motor's 2014 operating profit hits 4-year low

Hyundai Motor, South Korea's largest automaker, said Thursday that its 2014 operating profit declined to the lowest in four years as firm currency dented its record revenue mainly earned overseas.

Operating profit reduced 9.2 percent from a year earlier to 7. 55 trillion won (7 billion U.S. dollars) in 2014, the company said in a statement.

Revenue increased 2.2 percent to 89.26 trillion won in 2014, marking the largest in the company's history, but the operating profit declined on the local currency's appreciation to the U.S. dollar.

The company's global auto sales reached 4,961,877 in 2014 on robust demand for new models, including Genesis and Sonata, but the won/dollar exchange rate retreated 3.8 percent, reducing overseas earnings converted into the local currency.

The 2014 car sales figure was up 4.8 percent from a year earlier. Hyundai's overseas car sales increased 4.6 percent from a year earlier to 4,278,345 units, with domestic car sales rising 6. 7 percent to 683,532 vehicles.

Operating margin slid from 9.5 percent in 2013 to 8.5 percent in 2014, and net income reduced 14.9 percent to 7.65 trillion won last year.

During the fourth quarter, the company's revenue posted a record 23.57 trillion won, up 7.5 percent from a year earlier.

Hyundai sold 1,337,040 cars in the three-month period.

Operating profit declined 7.6 percent on-year to 1.88 trillion won in the fourth quarter, and net income dropped 22.2 percent to 1.66 trillion won.

Demand was strong in the fourth quarter for models customized to foreign customers, such as i20, helping boost the fourth- quarter revenue that was hampered by weak currencies in emerging markets like Russia's ruble plunge, the company said.

Hyundai said there remained uncertainties, including geopolitical risks in emerging economies and the prolonged trend of low growth and low inflation, but it noted that it will overcome the difficulties by expanding investment and enhancing competitiveness.

The company set its 2015 global sales target at 5.05 million cars, with 4.36 million cars set to be sold abroad and 0.69 million at home each.

Hyundai Motor Group, a parent company of Hyundai Motor and Kia Motors, said earlier that the country's Number two conglomerate plans to invest 80.7 trillion won in R&D and production line in the next four years.

Meanwhile, Hyundai decided to pay 3,000 won per share in its annual dividend for 2014 to holders of common shares, up 54 percent from the previous year.

The company also plans to pay interim dividend from this year after buying back its own stocks worth 460 billion won, or about 1 percent of the total outstanding stocks, in late 2014.

It came as part of efforts to boost shareholders' value as foreigners dumped Hyundai shares on worries about big costs for land won by the carmaker and its sister companies.

Hyundai, Kia and Hyundai Mobis won an auction on Sept. 18 for a prime property in Gangnam district in central Seoul for 10.6 trillion won, more than triple the assessed price.