Hyundai profit falls
Hyundai Motor Co, ranked fifth in global sales with affiliate Kia Motors, posted a surprise quarterly profit drop as a stronger South Korean won dented its overseas earnings, sending its shares falling the most in three weeks. The won rose almost 8 percent against the US dollar last year, its biggest gain since 2009, cutting the value of Hyundai’s overseas revenue in local currency terms and hurting the carmaker’s price competitiveness abroad. To make matters worse, the Japanese yen eased by 11 percent, handing Hyundai’s competitive edge back to its Japanese rivals. The profit decline came even as Hyundai Motor sold a record 1.23 million vehicles in the fourth quarter.
LG hit by slow demand
LG Display Co, the world’s second-largest maker of liquid-crystal displays, reported quarterly profit which trailed analyst forecasts because of slowing demand for Apple Inc’s iPads and a stronger won. Net income was 319.7 billion won (US$299 million) in the three months ended last month, compared with the 363.4 billion won average of 22 analyst estimates compiled by Bloomberg. Fourth-quarter sales rose 15 percent to 8.7 trillion won, according to a statement yesterday. The panelmaker reported a 6 billion won loss a year earlier. The LG Electronics Inc affiliate suffered as consumers shunned Apple’s original iPads in favor of a new mini version, which uses a smaller and less lucrative screen. A stronger won also cut the repatriated values sales from overseas as Japanese rivals benefited from a weaker yen. Operating profit, or sales minus the cost of goods sold and administrative costs, almost doubled to 587 billion won, compared with a loss a year earlier, LG Display said.
Commerzbank to axe jobs
Commerzbank, Germany’s second-biggest bank, yesterday said it is looking to axe between 4,000 and 6,000 jobs — or about 10 percent of its workforce — by 2016. “As part of our strategic agenda announced in November, Commerzbank is planning to invest more than 2 billion euros [US$2.7 billion] in core operations, as well as cost savings,” a bank spokeswoman told reporters. “Overall, the bank is assuming that 4,000 to 6,000 jobs will be cut group-wide by 2016. The exact number will be determined in negotiations with employee representatives that are likely to start in February,” she said. On Sept. 30 last year, Commerzbank’s total workforce numbered 56,287. The bank’s retail division — its high-street branch network — is set to bear the brunt of the cuts.
Business activity rises
Private business activity across the eurozone hit a 10-month high this month, according to a leading growth indicator released yesterday. The Purchasing Managers’ Index published by London-based Markit researchers, a survey of thousands of eurozone companies, logged 48.2 points compared with 47.2 points the previous month. This month marked a third rise running for the index, even though it remains below the boom-and-bust 50-point line indicating economic growth or contraction — a 16th shrinkage in 17 months. Manufacturing production fell for the 11th month in a row, with both the manufacturing and services sectors registering their smallest retreat in 10 months. The key eurozone economy of Germany powered back to growth, but No. 2 economy France is still in contraction.