S&P shifts to positive on Hyundai view

S&P said it revised its outlook for Hyundai Motor Co. and Kia Corp. to positive from stable and affirmed the companies’ BBB+ issuer and debt ratings.

The agency said it concurrently changed the outlooks for Hyundai Capital Services Inc. and Hyundai Card Co. Ltd. to positive from stable mirroring the outlook revision for their parent HMC. S&P also affirmed HCS’ BBB+ issuer rating and HCC’s BBB- issuer rating.

“HMC-Kia will likely sustain robust EBITDA margins of 11%-12% in 2024-2025. Following notable margin expansion in 2021-2022, margins for the combined HMC-Kia could improve to 13% in 2023 from 9.6% in 2022 and 8.6% in 2021. Revenue and margins in the first nine months of 2023 were better than we anticipated. Drivers were better volume growth, product mix improvements, favorable pricing, and relatively low incentives,” S&P said in a press release.

The agency said it forecasts EBITDA margins of 11%-12% in 2024-2025, indicating weaker consumer demand and a tougher pricing environment.

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