Hyundai, Kia expected to announce record 2024 earnings: Report

Seoul:  Hyundai Motor and Kia, South Korea’s top automakers, are expected to release their annual earnings results next week, drawing attention as to whether they can extend their streak of record-breaking performances, industry watchers said on Thursday.

According to an analysis of securities industry forecasts by Yonhap Infomax over the past three months, Hyundai Motor is estimated to report sales of 173.1 trillion won ($118.9 billion) and an operating profit of 14.8 trillion won for 2024.

While sales would mark a 6.4 per cent increase, operating profit is projected to decline by 1.9 per cent.

Kia is estimated to report 106.8 trillion won in sales and 12.8 trillion won in operating profit, representing on-year growth of 7.1 percent and 10.2 percent, respectively.

If these forecasts are realised, Kia would succeed in achieving a record annual performance, surpassing 100 trillion won in sales for the first time in its history.

Together, the two companies are estimated to report combined sales of 279.96 trillion won and an operating profit of 27.64 trillion won, surpassing their previous combined records of 262.47 trillion won and 26.73 trillion won set in 2023.

However, several variables, including currency fluctuations and quality-related costs, could impact the final results.

While the sharp depreciation of the South Korean won against the U.S. dollar at the end of last year positively affected sales and operating profits, it also led to an increase in provision for sales warranties.

Sales warranty provisions affect corporate earnings by reducing profit and increasing expenses when warranty claims are made.

In the third quarter, Hyundai Motor and Kia allocated nearly 1 trillion won in provisions for extended warranty measures.

“While increased sales warranty provisions are reasons for weaker performance, Hyundai and Kia’s strong partnerships and competitive edge in the evolving market landscape provide optimism for better results in 2025,” said Jang Moon-su, an analyst at Hyundai Motor Securities.

—IANS