Hyundai Motor expands dividends 54%
By Park Si-soo
Hyundai Motor said Thursday that it will expand dividends to 3,000 won for its 2014 results, up 54 percent from 1,950 won a year earlier, in a move to boost shareholder returns.
It will pay 3,100 won per preferred share, up 51 percent from 2,000 won. It also said it is considering introducing an interim dividend from this year.
The nation’s largest automaker reported lower-than-expected yearly operating profits, stoking concerns that the carmaker is losing its global competitiveness amid fiercer competition.
The company posted 7.55 trillion won ($6.95 billion) in operating profits last year, down 9.2 percent from 2013 and the lowest since 2010. The figure was also lower than the market consensus of 7.67 trillion won.
It posted 89.25 trillion won in sales in 2014, up 2.2 percent from the previous year. It sold 4.96 million cars globally last year, up 4.8 percent from a year earlier.
Hyundai’s share price fell 2.04 percent or 3,500 won to close at 168,000 won. The benchmark KOSPI closed at 1,920.82, down 0.41 points or 0.02 percent from a day earlier.
“Despite tough market conditions, our sales increased last year thanks largely to brisk sales of Genesis, Sonata and newly launched cars, but our profitability was weakened due to unfavorable exchange rates,” the carmaker’s chief financial officer Lee Won-hee said in a conference call at its headquarters in Yangjae, southern Seoul. “Our fourth quarter sales increased by 10.8 percent year-on-year thanks to brisk sales of our strategically important vehicles, such as the i20.”
Its fourth quarter sales were 23.57 trillion won, with 1.875 trillion won in operating profits. The company sold 1.337 million cars in the September-December period.
Shin Chung-kwan, an analyst at KB Investment and Securities, said Hyundai’s performance last year was “disappointing.”
“It failed to meet the market’s expectation,” he said. “It’s obvious that investors were disappointed by its last year performance. But they seem to be satisfied with its dividend payment and the possible introduction of an interim dividend.”
Hyundai expects a dramatic rebound this year.
“This year, we have several new cars to be released, including a new version of the popular SUV Tucson,” Lee said. “I think economic uncertainty will prevail for a while, but we will be able to make a better performance this year since our new cars’ contribution to the bottom line is expected to increase continuously.”
Hyundai aims to sell 5.05 million cars this year, including 690,000 in the domestic market. To that end, the carmaker has pledged to develop eco-friendly, energy efficient vehicles, proactively respond to market needs and ratchet up efforts to boost brand value.
Early this month, the company said it would invest about 81 trillion won over the next four years to improve facilities, expand production lines, develop cutting-edge technologies for smart and green cars and build a new headquarters in southern Seoul.
Under the road map, Hyundai is expected to spend an annual average of 20.2 trillion won through 2018, which would surpass its previous high of 14.9 trillion won in 2014.