Hyundai Motor, South Korea’s largest automaker, said Thursday its net earnings for the third quarter plunged 28.3 percent on-year to 1.61 trillion won ($1.53 billion), mainly due to unfavorable exchange rates that offset gains in sales.

Operating profit also dropped 18 percent to a little under 1.65 trillion won in the same period, but sales gained 2.2 percent to 21.28 trillion won, the company said in a regulatory filing.

Hyundai Motor said it sold 1,128,999 cars from July through September, up 1.8 percent from the year before when sales hit 1,109,205 units.

The company said unfavorable exchange rates took a severe toll on overall profits and canceled out benefits from the release of new car models. Hyundai released the all new Genesis premium sedan, the Sonata midsize family car, ix25 small crossover and the i20 super-mini that helped boost sales.

“The appreciation of the Korean won vis-a-vis the U.S. dollar by 6 percent in the third quarter compared to the year before, led to a sharp drop in profits,” the carmaker said. It added that a drop in output at its plants in South Korea further affected profitability.

The bottom line for the carmaker, the flagship of Hyundai Motor Group, the world’s fifth-largest automotive conglomerate, for the first nine months of 2014 backtracked 12.7 percent from a year earlier to 5.99 trillion won, with operating profit falling 9.7 percent to 5.67 trillion won.

Sales figures reached 65.68 trillion won, a slight gain of 0.5 percent from 65.37 million won tallied a year earlier. The carmaker said it sold 3,624,837 units up until September, up from 3,500,022 cars sold in the same three quarters of 2013.

Hyundai Motors said for the fourth quarter, it expected newer cars to reach show windows around the world to help sales and profits. It, however, said any gains will depend heavily on whether or not foreign exchange rates stabilize.

On the negative side, the company said it is bracing for a slowdown in demand for new cars, triggered by sluggish growth and geopolitical uncertainties.

“Every effort will be made to strengthen quality and cope effectively with all challenges so Hyundai can strive to improve its brand equity,” the carmaker said.

(Yonhap)