South Korea's top automaker, Hyundai Motor, Thursday reported its fifth consecutive drop in quarterly earnings after a slump in emerging market currencies slashed profits in the first three months of the year.
Net profit for the January-March period fell 2.2 percent to 1.98 trillion won ($1.83 billion), compared with 2.03 trillion won a year ago, the company said in a statement.
Chief financial officer Lee Won-Hee attributed the result -- which still beat the 1.71 trillion won predicted by 23 analysts surveyed by Bloomberg News -- to a "dramatic" weakening of the Russian and Brazilian currencies against the Korean won.
"Demand in these markets also slowed considerably, dealing a blow to our margins," he told a conference call.
Hyundai books some 85 percent of its sales overseas, so the strength of the won against other currencies can slash the value of the firm's profits at home.
Sales of its Russian and Brazilian plants calculated in the Korean currency dropped 41.2 percent and 11.2 percent from a year ago.
Lee said company had been trying to "offset the impact of currency swings in the emerging markets by raising prices... and trying to secure as much auto components locally as possible".
Operating profit tumbled 18.1 percent on-year to 1.59 trillion won, while sales dropped 3.3 percent to 20.94 trillion won, the company said.
But the market cheered the results, with Hyundai's shares rising 3.24 percent to 175,500 won.
"Hyundai has had a tough quarter," IBK Securities analyst Lee Sang-Hyun told Bloomberg. "Still, the company's sales are expected to recover."
The world's fifth-largest automaker has also struggled to meet shifting consumer demand for sport-utility vehicles, which have been growing in popularity thanks to their family image, Lee said.
Both domestic and international sales sank during the quarter, with 1.02 million cars sold abroad, down 3.6 percent from a year earlier, and domestic sales sinking 3.7 percent due to growing competition.
Still, Hyundai struck an upbeat note for the second half, counting on the new version of its Tucson SUV, unveiled earlier this year, to boost profits.