Kia Motors Q2 net drops 2.8 pct

Kia Motors Corp., Korea’s second-largest automaker, said Friday that its second-quarter earnings fell 2.8 percent on-year mainly due to losses from equity holdings in affiliates, despite brisk sales.

Net income came to 1.09 trillion won ($954.7 million) in the April-June period, compared to 1.12 trillion won tallied a year ago, the company said in a regulatory filing.

Sales rose 8.4 percent on-year to 12.6 trillion won in the three-month period, while operating profit jumped 18.1 percent to 1.2 trillion won.

For the six months of the year, Kia posted a record 2.3 trillion won in net profit, up 10.4 percent from a year ago on the back of strong overseas sales. Its first-half sales climbed 9.5 percent on-year to 24.3 trillion won and operating profit surged 25 percent to 2.34 trillion won.

Shares of Kia Motors were trading at 76,000 won on the Seoul bourse as of 10:50 a.m., down 0.39 percent from the previous session’s close.

Kia sold a total of nearly 1.35 million vehicles worldwide in the first six months, up 12 percent from a year earlier.

The Korean carmaker said that its better-than-expected performances in the overseas markets helped make up losses in the domestic sales.

“We have achieved a better performance in the first half thanks to improved competitiveness of our cars despite global economic uncertainties and persistent European woes,” said the company in a statement.

The first-half domestic sales fell 3.9 percent on-year to 238,000 units mainly due to sluggish demand.

The company said it sold 3,158 units of the new luxury sedan K9, released earlier in the year for the local market, in the first half.

“We have a plan of introducing the K9 in the United States in late 2013 or early 2014,” said Park Han-woo, Kia’s chief financial officer, in a conference call. “The K9 will be our global flagship model to raise our brand image.”

He said another K series car, the K3 compact, will be rolled out in September in Korea to spearhead the company’s domestic sales. Kia sells the K9, the K7 and the K5 in the Korean market.

“We expect the K3 to grow as our top selling model with annual sales of 450,000 units,” said the executive. “The K3 will be exported starting in the new year.”

On the other hand, Kia enjoyed brisk sales throughout the world, with a 24.5 percent surge in sales in Europe and a 17.8 percent jump in the United States.

Despite the deepening debt crisis in the eurozone, Kia’s first-half sales soared 24.5 percent on-year to reach 170,000 units, with a market share of 2.5 percent. The company said its popular compact cars like the Cee’d and the Pride boosted the sales increase.

In the US, Kia sold 289,000 vehicles in the six-month period, up 17.8 percent from a year ago, on the back of steady sales of the K5 sedans and the Sorento. Its market share slightly rose to 4 percent from 3.9 percent.

“Our 2011 sales target of 2.71 million units is expected to be achieved easily,” said Park. “And we seek to sell over 3 million vehicles worldwide next year on the back of an increased production line in China.”

Kia posted 2.48 million units in sales in 2011, up 18.6 percent from the previous year.

http://www.koreatimes.co.kr/www/news/biz/2012/07/123_116066.html

 

Category: Korea