Hyundai Mobis (012330.KS) reported first-quarter operating profit of 802.6 billion won, up 3.3% from a year earlier, the company said in a regulatory filing Thursday based on preliminary figures.
Revenue rose 5.5% to 15.5605 trillion won, while net profit fell 14.4% to 883.1 billion won.
Hyundai Mobis described the results as resilient amid somewhat weakened demand in the global auto market, caused by an uncertain business environment including Middle East risks. Increased sales to overseas automakers and expanded supply of high-value-added products centered on electronic components drove the overall results. The after-sales parts business also contributed to earnings growth as strong global demand continued, supported by favorable exchange rate effects.
However, the module and core parts manufacturing business, where large-scale investments are being made for future growth, posted a slight revenue increase of 4.9% from a year earlier but failed to turn its operating profit positive. This is attributed to the initial costs of new European plants for mass-producing electrification components, including the Slovakia PE (powertrain system) plant that entered full-scale production in the first quarter and the Spain BSA (battery system) plant set to begin operations this year.
"Even in a difficult business environment, we plan to execute research and development (R&D) investment exceeding 2 trillion won for the first time this year to strengthen core competitiveness for responding to the future mobility market," a Hyundai Mobis official said. "Along with company-wide profit improvement activities, gradual earnings improvement is expected as our customers are scheduled to launch various new vehicles this year."
In line with the medium- to long-term shareholder return policy announced last year, Hyundai Mobis will newly purchase 500 billion won worth of treasury shares this year and cancel them all. The company also plans to maintain its cash dividend at last year's level (6,500 won per share) following future board discussions.
