By Heekyong Yang

SEOUL (Reuters). Hyundai Motor Co will likely report a 4% increase in its first quarter profit due to a sharply weaker won boosting export value and compensating a long-term chip shortage, a slump in Russia sales and rising raw materials costs.

The South Korean automaker will report a net profit for March 31st at 1.37 trillion won ($1.11billion), according to Refinitiv SmartEstimate. That’s up from 1.32 trillion won one year ago.

Analysts said that the global shortage of chips is a problem for Hyundai. Hyundai and its affiliate Kia Corp are among the top 10 most-sold automakers in the world.

They said that Hyundai could see its production shrink further due to shortages in other parts. These are the parts it purchases from China. Many factories were shut down by COVID-19 lockdowns.

Kim Jin-woo from Korea Investment Securities said, “A weak will was a key boost for Hyundai.”

“The rapidity of the won depreciation was sufficient to compensate all of the problems including chip shortages and a rise in raw material prices after Moscow’s invasion in Ukraine.”

Nearly 7% of the South Korean won against the U.S. dollars in January-March was less than one year prior, reaching a low of almost two years.

Hyundai sales data revealed that Russian Hyundai factories produced cars for domestic use and exported nearly a third of the total volume sold in the first quarter.

Hyundai is the Russian automaker with the largest share, after Kia and the French. Renault (EPA: ) – The St. Petersburg assembly plant was closed on March 1. It was closing due to delays in delivering components. The company has yet to decide when operations will resume.

Kim stated that Hyundai would take an inevitable hit due to the Russia-Ukraine war. It would cost them money to maintain Russia operations while not selling as many cars.

Hyundai plans to release results on Monday.

($1 = 1,235.6000 won)