South Korea’s Hyundai Steel, an affiliate of Hyundai Motor Group, reported a Q1 2020 loss of KRW115.40bn ($93.5mn), compared with a net profit of KRW114bn a year earlier.
In Q1, the COVID-19 pandemic depressed steel demand worldwide, but the company’s quarterly losses almost tripled initial analyst estimates of KRW32.75bn.
Combined revenue declined by 8.0pc to KRW4.660bn in Q1 2020. The company reported an operating loss of KRW29.70bn compared to an operating profit of KRW212.40bn a year earlier.
With previously established goals of 9.1mn mt, Hyundai Steel sold 2.09mn mt, or 23pc, of its premium steel products target to global automakers in Q1 2020. Hyundai Steel also provides steel to its vehicle divisions.
Hyundai Motors, along with Kia Motors, forms the world’s fifth largest automotive group, but first quarter vehicle sales declined by 18pc compared to the same quarter last year. The group anticipate weak sales to continue worldwide as a result of the pandemic, as well modest recovery in Chinese auto demand.
Kim Sang-hyun, Hyundai Motor’s chief financial officer, said vehicle demand is expected to worsen in Q2 2020 because suspensions among auto dealerships and factories, which began last month, will last into at least next month.
The company sold 903,371 vehicles globally in Q1 compared with 1.02mn units in the same quarter a year earlier, down by 11.6pc. Hyundai noted that global auto demand fell by 24pc in Q1 2020 and by more than 40pc in March.
While auto sales slumped in Q1 2020, a cheaper currency and improved sales on higher end models helped Hyundai Motors’ revenue climb by 5.6pc to KRW25,320bn, however, irs net profit dropped 42.1pc to KRW552.7bn. The firm’s operating profit increased by 4.7pc to KRW863.8bn against same quarter a year ago.