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SEOUL, July 23 (Yonhap) -- Hyundai Motor Co., South Korea's leading automaker, said Thursday its second-quarter net profit fell 11.2 percent from a year earlier due to higher costs and production losses.

Net profit for the three months ended in June declined to 2.88 trillion won (US$2 billion) from 3.25 trillion won a year earlier, the company said in a press release.

"Higher raw material costs and production losses caused by a fire at a major parts supplier weighed on quarterly earnings," the company said.

Operating profit fell 20.8 percent to 2.85 trillion won from 3.6 trillion won a year earlier, while sales rose 1.9 percent to 49.21 trillion won from 48.28 trillion won.

This file photo, taken April 2, 2025, shows completed vehicles awaiting shipment to the United States at Hyundai Motor Co.'s port in Ulsan, 308 kilometers southeast of Seoul. (Yonhap)

"Strong sales of higher-margin hybrid vehicles and favorable exchange rates boosted revenue despite higher manufacturing and marketing costs," the company said.

The dollar rose to an average of 1,501.93 won in the second quarter from 1,404.04 won a year earlier, according to data from the Bank of Korea. A weaker won increases the value of exporters' dollar-denominated earnings when converted into the local currency.

Looking ahead, Hyundai Motor said uncertainties surrounding the global economy and intensifying competition in the automotive industry are expected to remain major challenges in the second half.

To navigate those challenges, the company plans to strengthen its growth momentum by launching new models, including the all-new Avante compact sedan and the hybrid version of the New Grandeur sedan.

The automaker also said it will maintain contingency plans to respond to downside risks, including U.S. tariffs.

The maker of the Sonata sedan and Palisade SUV said it remains committed to achieving its 2026 guidance of 1-2 percent annual sales growth and vehicle sales of 4.158 million units.

In 2025, the company posted sales of 186.2 trillion won and sold 4.138 million vehicles.

For the first six months of the year, net profit fell 17.5 percent to 5.47 trillion won from 6.63 trillion won a year ago.

Operating profit dropped 25.8 percent to 5.36 trillion won from 7.23 trillion won during the cited period. Sales were up 2.7 percent to 95.15 trillion won from 92.69 trillion won.

kyongae.choi@yna.co.kr
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