Kia reports strong Q2 performance, net profit up 40% on year

Kia on Friday reported a strong quarterly performance in the April-June period, with its net profit rising 40.1 percent on year to 1.88 trillion won ($1.43 billion).

The figure beat the market expectation of 1.60 trillion won, compiled by market tracker FnGuide.

Revenue came in at a record 21.88 trillion won, up 19.3 percent on year, with also a record operating profit of 2.23 trillion won, up 39.1 percent on year. Both figures exceeded the market expectations of 20.32 trillion in revenue and 1.83 trillion won in operating profit.

This marks the first time for the carmaker’s operating profit to surpass the 2-trillion-won mark.

Kia cited enhanced profit margins, lower incentives, and a weakening local currency for its strong performance. Despite supply disruptions in the first half of this year driven by chip shortages, sales of high-margin models, especially electric vehicles (EVs) in the U.S. and European markets, boosted the bottom line.

"Supply shortages and raw material price increases have caused difficulties, but the favorable currency situation helped achieve higher profitability than expected in the first half this year," said Joo Woo-jeong, chief finance officer of Kia, during a conference call on Friday.

The strong performance came despite a decline in the number of cars sold. Kia sold 733,749 cars in the second quarter, a 2.7 percent decline on year. EV sales, however, saw an increase of 78.9 percent on year in the April-June period, to 133,000.

On Thursday, Hyundai Motor posted a net profit of 3.08 trillion won, up 55.6 percent from last year’s 1.98 trillion won, far surpassing the market expectation of 2.03 trillion won.

Auto parts maker Hyundai Mobis reported a net profit of 769.7 billion won in the second quarter, up 15 percent on year, beating the market expectation of 580.1 billion won. Revenue stood at 12.3 trillion won, up 19.7 percent on year, and operating profit 403.3 billion won, down 28.4 percent on year.

Hyundai Motor owns 33.9 percent of Kia, and Kia owns 17.3 percent of Hyundai Mobis. Hyundai Mobis has 21.4 percent of Hyundai Motor.

BY SHIN HA-NEE [shin.hanee@joongang.co.kr]