This file photo provided by Kia Corp. shows the Sportage plug-in hybrid electric model.
SEOUL, Jan. 27 (Korea Bizwire) — Kia Corp., South Korea’s second-biggest carmaker, said Friday its fourth-quarter net profit soared 63 percent from a year earlier on improved chip supplies, strong demand for its high-end SUVs and a weak won.
Net profit for the three months ended Dec. 31 jumped to 2.037 trillion won (US$1.65 billion) from 1.248 trillion won during the same period of last year, the company said in a statement.
“A combination of higher average selling prices, lower incentives and the won’s weakness (against the dollar) buoyed the quarterly bottom line despite high inflation and global chip shortages,” Kia Chief Financial Officer Joo Woo-jeong said in the company’s earnings conference call.
Vehicle production began to improve late last year helped by recovering chip supplies. And robust vehicle sales in South Korea, the United States, and emerging markets except for China and Russia helped the quarterly results, the statement said.
Improved chip supplies pushed up vehicle production and sales, while increased sales of environmentally friendly SUVs and a weak won enhanced profitability, it said.
The dollar rose to an average of 1,359.26 won in the fourth quarter from 1,183.17 won a year earlier, according to the Bank of Korea.
On Friday, Kia shares closed 0.9 percent lower to 68,700 won on profit taking after reporting a 6.6 percent gain a session earlier reflecting its strong earnings results. The broader KOSPI rose 0.6 percent to 2,484.02 points.
This undated file photo shows Kia’s headquarters building in Yangjae, southern Seoul. (Yonhap)
To prop up sales, the company will focus on selling more upgraded versions of the Sportage, Seltos and Telluride SUVs, while planning to launch the all-electric EV9 flagship sedan in the first half of this year.
Operating profit more than doubled to 2.624 trillion won in the fourth quarter from 1.175 trillion won a year ago. Sales rose 35 percent to 23.164 trillion won from 17.188 trillion won.
For all of 2022, net income climbed 14 percent on-year to 5.409 trillion won. Operating profit jumped 43 percent to a record 7.233 trillion won and sales were up 24 percent to 86.559 trillion won during the same period.
In 2022, Kia sold a total of 2.9 million vehicles in global markets, and it aims to sell 3.2 million autos this year.
The maker of K5 sedans and Sorento SUVs is targeting to achieve an operating profit of 9.3 trillion won on sales of 97.6 trillion won in 2023. It also aims for an operating profit margin of 9.5 percent this year, up from 8.5 percent a year ago.
To enhance shareholders’ value, the company will buy back 500 billion won worth of its own ordinary shares this year and spend an additional 2 trillion won in the following four years to continue the share buyback program.
“The company will cancel half of the purchased stocks and use the remaining stocks for other purposes this year,” Joo said.
(Yonhap)
