Kia Ups 2023 Earnings Guidance After Strong Q2 Results | Be Korea-savvy

Kia Ups 2023 Earnings Guidance After Strong Q2 Results

This file photo offered by Kia Corp. shows the flagship EV9 electric SUV.

This file photo offered by Kia Corp. shows the flagship EV9 electric SUV.

SEOUL, July 27 (Korea Bizwire)Kia Corp., South Korea’s second-biggest carmaker by sales, on Thursday raised its annual sales and profit guidance for the year after reporting robust earnings in the second quarter on a weak won and an improved product mix.

Kia forecast its sales will be more than 100 trillion won (US$78.2 billion) in 2023, higher than its January guidance of 97.6 trillion won, while revising up its operating profit margin to 11.5-12 percent from 9.5 percent.

The revised sales target is 16 percent higher than the revenue of 86.56 trillion won reported last year.

The company plans to achieve the targets by focusing on sales of high-end SUV models and all-electric models, such as the EV6 and the EV9 SUVs, in global markets.

On Thursday, Kia shares rose 0.6 percent to 83,100 won, in line with the broader KOSPI’s 0.4 percent gain.

For the three months ended in June, net profit jumped 50 percent to 2.82 trillion won from 1.88 trillion won during the same period last year, Kia said in a statement.

“A combination of a weak won, increased production amid eased chip shortages, increased sales of high-end models, and reduced incentives (for customers who purchase Hyundai vehicles) gave a boost to the quarterly bottom line,” Kia Chief Financial Officer Joo Woo-jeong said in the company’s earnings conference call.

The U.S. dollar rose to an average of 1,315 won in the second quarter from 1,260 won a year earlier. A weak won drives up the value of an exporter’s dollar-denominated earnings when converted into the local currency.

Looking ahead, Kia expected high interest rates, high consumer prices and geopolitical risks to remain worries for the company in competition with its rivals in global markets.

Robust demand for the flagship EV9, launched in the domestic market in June, and other high-end SUVs will help the company report solid earnings results in the coming quarters, Joo said.

The company said it will begin the production of the EV9 in Europe and the United States during the third quarter for sale in the fourth quarter.

Operating profit also jumped 52 percent to 3.4 trillion won in the second quarter from 2.23 trillion won a year earlier. Sales rose 20 percent to 26.24 trillion won from 21.88 trillion won during the cited period.

From January to June, net income surged 69 percent to 4.94 trillion won from 2.91 trillion won a year earlier.

Operating profit soared 63 percent to 6.28 trillion won in the first half from 3.84 trillion won a year ago. Sales were up 24 percent to 49.94 trillion won from 40.23 trillion won.


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