Moody’s keeps Hyundai Motor’s Baa1 rating despite weak 2017 results
SEOUL-- Moody's Investors Service has said it will maintain Hyundai Motor Co.'s Baa1 rating despite weaker earnings results for 2017.
On Thursday, Hyundai Motor posted a 21 percent on-year decline in full-year net profit, at 4.546 trillion won (US$4.28 billion) for 2017, compared with 5.719 trillion won a year earlier. A strong won and lower demand in China and the United States were downside factors.
"Hyundai Motor's weakened profitability for 2017 was mainly a result of sluggish growth in auto shipments, higher incentive expenses to cope with intense competition and adverse movements in exchange rates," Wan Hee Yoo, a Moody's Vice President and senior credit officer, said Friday in a statement.
Although this level of profitability is weak for a company with a Baa1 rating, the weakness is mitigated by Hyundai Motor's healthy balance sheet, Yoo said.
Moody's expected that Hyundai's unit shipment will see low- to mid-single-digit growth in 2018, due mainly to an expected sales recovery in China and the launch of new models, such as the Kona subcompact sport-utility vehicle.
Source: Yonhap News Agency