▪ Sales and revenue grew by 6.9% and 4.1% respectively in H1; operating deficit increased due to foreign exchange rate decline and higher employee cost
▪ Q2 sales grew by 2.4% over previous quarter; exports also grew by 6.3%, showing gradually stabilizing situation in overseas markets
▪ Company to increase exports diversification, explore new emerging markets and implement a plan to expand global sales and improve profitability
SsangYong Motor (CEO Lee Yoo-il;www.smotor.com/en), part of the Mahindra Group, today announced that it sold 33,235 units in the domestic market and 41,000 units (including CKD) in its overseas markets in the first half of this year, totaling to a sales volume of 74,235 units. This is a 6.9% growth over same period last year. Based on this performance, the Company posted revenue of 1,728.3 billion won, operating deficit of 16.5 billion won, and net loss of 18.5 billion won.
However, despite the 6.9% increase in sales on the back of growing SUV markets worldwide and demand for the Company’s main models, the Company’s profitability in exports deteriorated due to the sudden decline in the foreign exchange rate, and its operating deficit increased by 15% compared to same period last year.
In particular, for the quarter, sales in Q2 decreased by 1.7% compared to same period last year. In Q1, the Company’s sales grew by 17.3% over same period last year. The year-on-year growth slowdown in Q2 negatively affected the profitability of the Company.
Domestic sales in the first half grew by 13.5% over same period last year, but compared to Q1 sales growth of 26.4% YoY, Q2 sales grew by 2.8% showing a sales slowdown.
Exports increased by 2.1% over same period last year, but in Q1, exports grew by 10.6% YoY, whereas in Q2, it declined by 4.8%.
However, compared to Q1 sales, Q2 sales increased by 2.4%, and exports also increased by 6.3% showing a stabilizing sales situation in the global market.
In terms of sales by model in H1, sales of the New Korando C and the Korando Sports increased by 8.7% and 17.3% respectively to 28,923 units and 19,484 units, accounting for 65% of total sales.
However, despite growth in sales, the foreign exchange decline had an adverse impact on revenue in overseas market. Along with this, changes in the product mix in the domestic market, country mix in overseas market, and higher employee costs led to operating deficit of 16.5 billion won and net loss of 18.5 billion won.
SsangYong Motor already adjusted its annual sales target in the beginning of the year reducing it by 6% against the original business plan, mainly due to impact of depreciation of the local currencies in its main exports markets like Russia and demand decrease in BRICs emerging markets.
Lee Yoo-il, CEO of SsangYong Motor, commented that “Concerns over steep decline in the exchange rate are becoming a reality now, and despite the overall growth in sales, the Company’s operating loss is more than expected.” Nonetheless, he added that “we will work on a vigorous plan to further expand our global sales and improve our profitability.”