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SEOUL, Oct. 26 (Xinhua) -- Hyundai Motor, South Korea's largest automaker, saw its third-quarter operating profit fall to the lowest in about seven years as global economic slowdown and sagging domestic demand reduced car sales at home and abroad.
Operating profit was 1.07 trillion won (about 940 million U.S. dollars) in the three months ending Sept. 30, down 29 percent from the same period last year, the company said in a regulatory filing on Wednesday.
It was the lowest since the company adopted international financial reporting standards (IFRS) in 2010. After peaking at 2.53 trillion won in the second quarter of 2012, Hyundai's profit kept falling.
Revenue fell 5.7 percent from a year earlier to 22.08 trillion won in the July-September period, and net income slumped 7.2 percent to 1.12 trillion won.
The ratio of operating profit to revenue came in at 4.8 percent, down from 7.2 percent a year ago. The ratio continued to slide from 10.3 percent in 2011 to 9.5 percent in 2013 and 6.9 percent in 2015.
Hyundai's worsened earnings followed the protracted global economic slump especially in Brazil and Russia, major emerging markets of the South Korean auto giant. It resulted in lower external demand.
In the domestic market, the end in June of a temporary tax cut in consumption tax led to weaker demand for cars.
Partial strikes by unionized workers continued from mid-July to late September, disrupting production and sales at home and abroad. It cost Hyundai about 3.1 trillion won.
Executives of Hyundai Motor Group's 51 affiliates decided voluntarily to slash their salaries by 10 percent starting this month amid the worsening business conditions.
It marked the first time in about seven years that the group's executives make a voluntary salary cut. Subject to the pay cut reaches about 1,000 executives.
For the first nine months of this year, Hyundai's revenue rose 2.9 percent to 69.11 trillion won compared with the same period of last year.
However, operating profit dropped 13.8 percent to 4.17 trillion won in the cited period, with net income declining 6.6 percent to 4.65 trillion won.
The company sold 3,477,911 vehicles globally in the January-September period, down 1.7 percent from a year ago. Domestic car sales declined 3.3 percent to 481,248 units, while sales in overseas markets dipped 1.4 percent to 2,996,663 units.
Hyundai said in a statement that weaker currencies in emerging markets and falling demand continued to weigh down on earnings and that labor strikes in local factories boosted fixed costs amid lower factory utilization.
Operating costs increased as Hyundai expanded R&D investment for future growth and boosted marketing activity to launch its Genesis luxury brand, the company said.
