Seoul: Hyundai Mobis Co., the leading auto parts manufacturer in South Korea, reported a 6.3 percent decline in its net profit for the second quarter compared to the previous year, attributing this decrease to diminished equity gains from its affiliates. For the quarter ending in June, the company's net profit fell to 934.4 billion won (approximately US$680.8 million), down from 997.6 billion won recorded during the same period last year.
According to Yonhap News Agency, the decrease in equity gains was primarily due to a significant equity gain from Hyundai Motor Co. reflected in the previous year's second quarter, which was bolstered by the carmaker's robust earnings results. Hyundai Motor, in contrast, saw its net profit for the second quarter decline by 22 percent year-on-year to 3.25 trillion won, impacted by newly imposed U.S. import tariffs that came into effect in April.
The U.S. government, on April 2, began enforcing a 25 percent tariff on all imported vehicles, a move that has affected Hyundai Motor's profitability. Hyundai Mobis holds a 21.86 percent stake in Hyundai Motor, linking its financial performance closely with that of the carmaker.
Despite the decline in net profit, Hyundai Mobis experienced a 36.8 percent increase in operating profit, reaching 870 billion won in the second quarter, up from 636.1 billion won a year earlier. Sales also saw an 8.7 percent rise to 15.93 trillion won from 14.65 trillion won. The company attributed the improved operating results to a better product mix driven by strong sales of high-end electronic components and a weaker won against the U.S. dollar, enhancing the repatriated value of overseas after-sales component revenue.
For the first half of the year, Hyundai Mobis reported a 5.7 percent increase in net income to 1.96 trillion won, compared to 1.86 trillion won in the corresponding period last year. The company secured orders worth US$2.12 billion from global clients, excluding Hyundai Motor Co. and Kia Corp., reaching 30 percent of its annual target of $7.45 billion amid ongoing uncertainty surrounding U.S. tariff policies.
Hyundai Mobis currently generates 90 percent of its overall parts sales from Hyundai Motor and Kia Corp. The company has set a strategic goal to increase the share of its overseas parts sales from 10 percent to 40 percent by the year 2033.