Moody's changes Hyundai, Kia outlooks to positive

Moody's Investors Service said it has changed to positive from stable the outlook on the Ba1 long-term ratings of Hyundai Motor Co. and the Ba2 long-term ratings and issuer rating of Kia Motors Corp.

Moody's said the change in outlook reflects the two companies' improving performances in major world automotive markets and their progress in strengthening financial leverage with support from their growing presence in the global auto markets.

Kia is a consolidated subsidiary of Hyundai Motor Co. and the two companies are working toward integrating many of their areas of operation.

Moody's said that Hyundai and Kia continue to show considerable progress in several important financial and operational areas. Both companies have maintained and/or increased their global market shares and unit sales - despite the industry downturn in the United States - and reduced their cost structures.

Furthermore, the two have successfully introduced attractive new models to maintain their dominance - with a combined share of more than 70% - of Korea's automotive market.

At the same time, Moody's said that Hyundai and Kia are becoming increasingly dependent on overseas markets, a development which makes earnings and cash flow very sensitive to exchange-rate volatility. Nevertheless, Moody's said Hyundai and Kia will be able to manage such risk while - at the same time - achieve continued improvements in earnings and cash flow.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.