SEOUL (Bloomberg) -- Hyundai Motor's fourth-quarter profit fell 19 percent after the weaker yen and ruble eroded overseas earnings.
Net income declined to 1.66 trillion won ($1.5 billion) in the quarter from 2.06 trillion won a year earlier, the company said in a statement today.
A weaker yen gave Hyundai’s Japanese rivals including Toyota Motor Corp. a competitive edge in overseas markets including the U.S., while a plunge in the ruble lowered the value of earnings in Russia.
To reassure investors, the company will increase its annual dividend by 54 percent and consider paying out an interim dividend this year, Chief Financial Officer Lee Won Hee said on a conference call.
“Hyundai’s decision to increase the dividend payout is a step in the right direction and is meaningful in that it restores investors’ expectations,” said Heo Pil Seok, CEO of Midas International Asset Management. “It will be a difficult year for Hyundai in terms of profit or volume sales growth, so having a more shareholder-friendly approach will be helpful.”
Fourth-quarter operating profit, or sales minus the costs of goods sold and administrative expenses, fell 7.6 percent to 1.88 trillion won.
Full-year net income dropped 14 percent, the most since 2008, while sales increased 2.2 percent.
The won appreciated 5.7 percent against the yen in the fourth quarter, according to data compiled by Bloomberg. The ruble’s 33 percent slump against the South Korean currency reduced the value of repatriated earnings from Russia, where Hyundai produced and sold 237,000 vehicles last year, according to company data.
“We expect the uncertainties about currencies in emerging countries, including Russia, to continue in 2015,” Lee said.
Hyundai said Jan. 2 it plans to increase global sales by 1.7 percent, the slowest growth since 2006, to 5.05 million vehicles this year. Lee today said the automaker should exceed that target.
“The restriction comes from the lack of new plants opening or new lines beginning production this year,” said Lee Sang Hyun, an analyst at IBK Investment & Securities Co.
In the U.S., Hyundai sold a record 725,718 vehicles in 2014, although its market share fell to 4.4 percent from 4.6 percent in 2013.