Despite the lengthy strike staged by unionized workers at its biggest customers Hyundai Motor Co. and Kia Motors Corp., Hyundai Mobis Co. reported solid results for the July-September period thanks to brisk sales in China and an increase in core auto component sales amid the release of new and high-end car models at home and abroad.

South Korea’s largest auto parts supplier Hyundai Mobis said on Friday that its net income for the third quarter was 705.8 billion won ($616.9 million), up 14.3 percent from a year ago. Its operating profit also climbed 7.7 percent on year to 721.7 billion won on sales of 8.78 trillion won, up 3.5 percent.

Park In-woo, an analyst at Mirae Asset Securities Co., said that despite the worst-ever strike at the country’s largest automakers’ manufacturing plants, the company managed to remain resilient thanks to a rise in its sales in China in line with a recovery of auto demand in the country, as well as the opening of its new factory in Mexico. Its focus on auto parts for high-end car models also helped buoy the company’s profits, he added.

The company’s on-quarter earnings in the July-September period, however, fell sharply due to reduced working days amid the lengthy strike staged by Hyundai Motor and Kia Motors’ unionized workers and summer vacation season. The strong Korean currency against the U.S. dollar also weighed on the company’s outbound shipment. Third-quarter sales dropped 10.9 percent from the previous quarter, while operating income and net income fell 8 percent and 16.8 percent, respectively, according to the company.

The company’s cumulative net profit in the first nine months of the year increased 7.3 percent to 2.35 trillion won from a year ago. Operating profit also jumped 7.6 percent to 2.22 trillion won while sales increased 7.5 percent 27.97 trillion won.

By sector, cumulative sales from its module and core component manufacturing business in the first three quarters ended September were 23.02 trillion won, up 8 percent from a year ago. Sales of other components also increased 5.1 percent to 4.71 trillion won over the same period.

Market observers remain optimistic about Hyundai Mobis’ performance next year. Lee Sang-hyun, an analyst at IBK Securities Co., said more core components produced by Hyundai Mobis will be applied to environmentally-friendly vehicles such as Hyundai Motor’s IONIQ and Kia Motors’ Niro, as well as the new K7 sedan. Following the launch of Hyundai Motor’s luxury brand Genesis, demand for Hyundai Mobis’ advanced driver assistance systems (ADAS) is expected to increase in the mid- to long-term.

By Yoon Jin-ho

[ⓒ Pulse by Maeil Business News Korea & mk.co.kr, All rights reserved]