Moody's lowers Hyundai, Kia views to negative

Moody's Investors Service said it changed the outlook on Hyundai Motor Co., Kia Motors Corp. and Hyundai Mobis Co., Ltd. to negative from stable.

The agency also said it affirmed the Baa1 issuer ratings of Hyundai Motor, Kia and Hyundai Mobis, along with the senior unsecured bond ratings of Kia.

The outlook revision reflects the increasing likelihood that the company's profitability will remain weak over the next one- to two-years because of challenging operating conditions in its key markets and continued cost pressures, Moody's said.

Given Hyundai's weak operating performance during the first nine months of 2018, Moody's said it expects the company's adjusted EBITA margin to fall to about 3.6% in 2018 from 5.6% in 2017.

Despite the moderate improvement, this level of profitability is meaningfully lower than the company's historical averages over the past four- to five-years, reflecting the heightened challenges in its key U.S. and China markets, the agency said.

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