Hyundai’s 1Q Sales Up 7 Pct, Net Profits Strong at US$347.4 Mln

SEOUL, Korea, May 13, 2003 - Lifted by a continuing strong export performance, Hyundai Motor Co. saw its first quarter sales revenues for this year reach 6.085 trillion won (US$5.063 billion), representing a 7.0 percent improvement over the comparable period last year.

A stronger Korean won dragged down net profits by 28.8 percent y-o-y to 417.6 billion won (US$347.4 million) surpassing analyst’s expectations. Foreign exchange exposure and equity losses from subsidiaries contributed to the fall in first quarter net non-operating income to 18.7 billion won from 280.8 billion won a year ago.

The gross profit improved by 12.6 percent y-o-y to 1.742 trillion won, generally in line with the company’s projected gross profit of 6 trillion won for this year while the operating profit improved by 6.1 percent to 612.9 billion won resulting in an operating margin of 10.1 percent.

The company has seen a steady increase in the average selling price of its vehicles at home and abroad, an improved product mix that has contributed to a strong bottom line. This year, the average selling price of a domestically sold Hyundai will reached US$15,000., or $400. more than last year. The average price of exported models will see a comparable improvement, reaching US$10,100. this year.

Selling, general and administrative costs increased by 16.4 percent to 1,129 trillion won. While material costs held steady, labor and research costs rose, the latter recalculated under revised Generally Accepted Accounting Practices which transfers R&D expenditures from Cost of Goods Sold to Selling, General and Administrative expenses. In addition, 5.1 percent of sales revenues were conservatively set aside for future warranty provisions (compared with 5.3 percent in the first quarter of 2002).

The company’s holdings of cash and cash equivalents (including marketable securities) rose by 28.4 percent to 4.881 trillion won while the debt position was improved, declining 34.2 percent to 3.173 trillion won.

For this year, the company has earmarked 2.605 trillion won in investments for new model development, the integration of R&D facilities and the construction of overseas manufacturing plants in the United States and China.

For the first four months of this year, Hyundai Motor has commanded a domestic market share of 47.7 percent on sales of 245,000 units, a slight improvement over the 47.4 percent in 2002.

Exports rose 8.1 percent in the first four months of this year to 128,000 units. A notable trend is the increasing overseas popularity of larger, higher value added Hyundai products like the Santa Fe SUV and Sonata mid-size sedan. Hyundai saw is U.S. sales grow by 8.1 percent in the Jan-April period while in Europe, its sales rose 11.3 percent to 92,100 units helped by the growing demand for the Getz supermini.

Established in 1969, Hyundai Motor Co. has grown into the Hyundai Automotive Group, the world’s seventh largest automotive manufacturer which includes Kia Motors Corp. and over two dozen auto-related subsidiaries and affiliates. Employing nearly 50,000 people worldwide, Hyundai Motor posted US$21.94 billion in sales in 2002. Hyundai motor vehicles are sold in 166 countries through 4,504 dealerships and showrooms. Further information about Hyundai Motor Co. and its products is available on the Internet at http://www.hyundai-motor.com

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