Hyundai Motor's biggest-ever dividend greeted with outlook concern

Thu Jan 22, 2015 3:52am EST
 
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By Hyunjoo Jin

SEOUL (Reuters) - Hyundai Motor Co announced its biggest-ever dividend on Thursday to appease shareholders angered by a $10 billion property buy, but the payout failed to distract investors from growth prospects clouded by declines in the rouble and yen.

Shares of the Korean automaker - the world's fifth-biggest when paired with sister Kia Motors Corp - ended at a more than two-week low after the announcement. Earlier in the day, Hyundai missed analyst estimates by posting a 19 percent decline in October-December net profit.

Hyundai-Kia splashed out on land for new headquarters last year as economic turmoil in Russia undermined earnings in a country where the pair rank second. Meanwhile in the U.S., the pair's No.2 market, a weak yen made rival Japanese cars cheaper.

Currency risks are likely to persist in Russia as well as in other emerging markets this year, Hyundai President Lee Won-hee said after the automaker released its earnings.

In the U.S., where a weak yen lets Japanese makers offer aggressive discounts, Hyundai's average sales incentive will stay at the 2014 level even with sales of new models such as the Sonata sedan and the Tucson sport utility vehicle, Lee said.

LOW EXPECTATIONS

Hyundai raised its year-end dividend for 2014 by over 50 percent to 3,000 won per share, and said it would continuously increase payouts in coming years.   Continued...

 
People visit a car showroom of a Hyundai dealership in Stavropol, southern Russia, December 17, 2014. REUTERS/Eduard Korniyenko