In this news, we discuss the Hyundai Motor swings to net loss in third quarter as costs of engine issues weigh.
SEOUL (Reuters) – South Korean company Hyundai Motor Co 005380.KS said on Monday it went to a net loss in the July-September quarter, largely missing analysts’ estimates as a charge related to engine problems weighed on earnings.
Hyundai, the world’s fifth-largest automaker when combined with subsidiary Kia Motors Corp 000270.KS, reported a net loss of 336 billion won ($ 297.72 million) for the third quarter, well below average profits of 1 trillion won by 12 analyst estimates respected by Refinitiv.
Hyundai and Kia said last week that their third-quarter profits will reflect quality costs of a total of 3.36 trillion won, of which Hyundai was 2.1 trillion won and Kia was 1.26 trillion won. .
$ 3 billion more in provisions related to engine problems took their total impact from a series of long-standing quality issues to nearly $ 5 billion.
Hyundai and Kia have recalled vehicles because of defects that increase the risk of engine stalls and fires. US authorities have been investigating the pair for the nature of these recalls.
Hyundai also said on Monday that it achieved an operating loss of 314 billion won. Revenue increased 2.3% year on year to 27.6 trillion won.
“The third quarter results reflect the provision expense related to the engine as the company took preventative measures to ensure customer safety and cover any possible future increases in quality expenses,” Hyundai said in a statement.
Hyundai shares rose 4.2% after the results against a 0.3% drop in the broader KOSPI .KS11 market at 0516 GMT.
Reporting by Heekyong Yang and Joyce Lee; Editing by Christopher Cushing and Kim Coghill
Original © Thomson Reuters