Hyundai AutoEver enjoys boon from higher IT service demand from affiliates

2019.11.04 14:44:25 | 2019.11.04 15:32:19

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Hyundai AutoEver Corp., in-house IT unit of South Korean auto giant Hyundai Motor Group achieved sales milestone of over 1 trillion won ($860.4 million) during the first nine months in line with its parent’s active incorporate of smart mobility solutions.

Hyundai AutoEver said Sunday its operating profit for the third quarter reached 20.6 billion won on a consolidated basis, falling 9.5 percent from the previous quarter but increasing 5.2 percent from the same period last year. Revenue totaled 385.4 billion won, down 5.6 percent on quarter but up 11.1 percent on year.

For the January-September period, the company reported 55.1 billion won in operating profit, up 12.5 percent from the same period last year. The operating margin was 5 percent.

Revenue for the nine-month period was 1.1 trillion won, the company’s first breach of the 1-trillion won milestone. The figure was up 10.5 percent from a year-ago period.

Hyundai AutoEver shares gained 2.06 percent to end at 54,400 won Monday.

Hyundai AutoEver earned 46.1 percent of its revenue from the system integration business and 53.9 percent from IT outsourcing business in the January-September period, according to the company.

The system integration business’s main projects included connected car system in Europe and upgrading of online sales platform for Genesis, the luxury sedan label of Hyundai Motor. Also, the division improved IT work process at Hyundai Steel Co. as well as set up a comprehensive automotive parts management system for Hyundai Mobis.

In the second quarter, the IT service team of about 30 engineers at the auto parts maker Hyundai Mobis was transferred to Hyundai AutoEver. Hyundai Motor Group plans to consolidate the IT teams at its major subsidiaries into a comprehensive IT service unit under Hyundai AutoEver.

The in-house IT service company was especially busy in India and America this year. Its revenue from IT business in India jumped 97 percent in January-September from a year-earlier period after Kia Motors Corp. opened a car factory in India.

In America, the IT service provider worked on various projects including next-generation IT system at Hyundai Capital Services, and upgrades on corporate websites for Hyundai Motor and Kia Motors, which resulted as a 16.8 percent on-year increase in revenue. Its revenue from Europe also grew 13.4 percent over the same period. Business in China, however, was down with revenue sinking 11.5 percent on year.

Market experts pick Hyundai AutoEver as one of key beneficiaries of Hyundai Motor Group’s investment in future automotive technology. The group, which aims to evolve into a comprehensive automotive solution company beyond traditional manufacturer, plans to invest about 15 trillion won in new mobility solutions such as self-driving and car-sharing, over the next five years. As part of such effort, Hyundai AutoEver formed a partnership with Hyundai Motor and Upstream Security, a cloud-based cybersecurity platform for connected cars based in Israel, to collaborate on technology projects.

“Hyundai AutoEver makes nearly 90 percent of its revenue from Hyundai Motor Group affiliates,” noted Lee Kyung-il, senior researcher at Cape Investment & Securities, as he projected the IT service provider to enjoy a boon from the group’s increased IT service demand with the introduction of new technologies.

Moreover, the auto conglomerate is planning to build a new corporate center in southern Seoul, with the project’s total worth estimated at 3.7 trillion won. Lee expects Hyundai AutoEver’s share of the mega projects at between 3 to 7 percent.

Hyundai AutoEver went public on the country’s main bourse on March 28 this year, debuting at 48,000 won.

By Chung Seung-hwan and Cho Jeehyun

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